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CRITICAL MINERAL PROCESSING SCHEME

05 Nov 2026

Tags: Prelims   Current events of national and international importance

Source: The Indian Express

Context: Union Cabinet approved a ₹2,814 crore scheme to develop domestic lithium and nickel processing capacity, reduce import dependence and counter China's dominance in critical mineral processing.

Key Features

  • Financial Outlay: ₹2,814 crore.
  • Capital Subsidy: 30% of eligible investment for setting up processing plants.
  • Target: Four processing plants:
    • Lithium: 2 plants, minimum capacity of 30 kilotonnes (kt) each.
    • Nickel: 2 plants, minimum capacity of 50 kt each.
  • Maximum Capital Support:
    • Lithium: ₹500 crore per beneficiary.
    • Nickel: ₹900 crore per beneficiary.
  • Beneficiary States: Andhra Pradesh, Odisha, Gujarat and Maharashtra.
    • Gujarat and Andhra Pradesh: Rare earth processing.
    • Odisha: Nickel processing.
    • Maharashtra: Lithium processing.

Significance

  • Supports electric vehicles (EVs), battery energy storage systems (BESS), electronics, defence and speciality steel.
  • Reduces import dependence and vulnerability to supply disruptions.
  • Addresses China's dominance in critical mineral processing (around 90% of global capacity).

National Critical Minerals Mission (NCMM)

  • Launched: 2025.
  • Mission Period: 2024–25 to 2030–31 (7 years).
  • Objective: Strengthen domestic critical mineral exploration, mining, processing, recycling and supply chains.
  • National Critical Mineral Stockpile Programme: Proposed strategic reserves to ensure uninterrupted mineral supplies.
  • Allocation for Stockpile Development: ₹500 crore during the mission period.

Prelims Pointers

  • Lithium: Important for lithium-ion batteries; a key mineral for electric mobility and energy storage.
  • Nickel: Used in stainless steel and battery manufacturing.
  • Rare Earth Elements (REEs): Group of 17 elements, comprising 15 lanthanides, scandium and yttrium; used in permanent magnets, electronics and defence technologies.
  • Critical Minerals: Minerals essential for economic development and national security but vulnerable to supply-chain disruptions due to limited availability or concentrated production.

Prelims Question

Q1. With reference to the Critical Mineral Processing Scheme, consider the following statements:

  1. It provides a capital subsidy of 30% of eligible investment for establishing processing plants.
  2. It targets two lithium processing plants with a minimum capacity of 30 kilotonnes each.
  3. The maximum capital support for a nickel processing plant is ₹500 crore per beneficiary.
  4. The scheme aims to reduce India's dependence on imports and address China's dominance in critical mineral processing.

Which of the statements given above are correct?

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 2 and 4 only
(d) 2, 3 and 4 only

Answer: (c) 

Explanation:

  • Statement 1 is Correct: Capital subsidy is 30% of eligible investment.
  • Statement 2 is Correct: Two lithium plants, each with a minimum capacity of 30 kt, are targeted.
  • Statement 3 is Incorrect: Maximum support for nickel is ₹900 crore per beneficiary; ₹500 crore is for lithium.
  • Statement 4 is Correct: The scheme seeks to strengthen domestic processing capacity and reduce supply-chain vulnerabilities.

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