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Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy, is the sole repository of rare earths in India. The government will take a decision on rolling out a scheme to subsidise domestic production of rare earth magnets in 15-20 days, Union Minister H D Kumaraswamy said on Tuesday.
The government will take a decision on rolling out a scheme to subsidise domestic production of rare earth magnets in 15-20 days, Union Minister H D Kumaraswamy said on Tuesday.
Stakeholder consultations are underway to determine the quantum of subsidy to be offered under the scheme. If the total incentives involved cross ₹1,000 crore, the scheme will be sent to the Union Cabinet for approval, Secretary in the Heavy Industries Ministry Kamran Rizvi said.
"One Hyderabad-based company... they are showing interest. They have promised that they will deliver 500 tonnes by this year-end, December. We have (had) discussions with the Mines Minister. Our Secretary and our ministry are working on, ultimately, a decision (will be taken) I think within 15-20 days," Kumaraswamy, the Minister for Heavy Industries and Steel, told reporters here.
China's recent restrictions on exports of key metals caused widespread disruption in the manufacturing of automobiles and semiconductor chips in a host of countries, including India.
The secretary said the actual production of rare earth magnets will take about two years, and the government, along with the industry, is looking at alternative sources of procurement in the interim period, including Japan and Vietnam.
"So you are aware that rare earth is available in Japan, in Vietnam, and efforts are going on to take from there," Rizvi said.
Rare earth magnets include neodymium-iron-boron (NdFeB). It is used for high-performance automotive applications such as traction motors in electric vehicles (two-wheelers and passenger vehicles) and power steering motors (in passenger vehicles) in both electric vehicles and internal combustion engine vehicles.
The subsidy will facilitate investment for establishing processing facilities for companies to convert rare earth oxides into magnets. Indian Rare Earth Magnets Ltd, a PSU under the Ministry of Atomic Energy, is the sole repository of rare earths in India. They have enough rare earths to make 1,500 tonnes of magnets, officials said.
Secretary in the heavy industries ministry Kamran Rizvi said whether or not the scheme will go to the Union Cabinet for approval depends on the quantum of incentives to be offered.
"It depends on the level of incentives. If it is less than ₹1,000 crore, (heavy industries) minister and finance minister can do it. If it goes beyond ₹1,000 crore, it has to go to the Cabinet.
"We do not know the quantum of subsidy required yet, stakeholder consultations are on, as the minister pointed out, so varied responses have come. Somebody wants 50 per cent, somebody wants 20 per cent, so it will be subject to a competitive bid, then we will know the quantum of support required," Rizvi added.
Officials said 30 automotive firms have sought authorisation from the Directorate General of Foreign Trade (DGFT) to import rare earth magnets from China a fortnight ago, so that production is not impacted negatively due to the shortage.
Source: HindustanTimes
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