Incentive Scheme for Critical Mineral Recycling
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Incentive Scheme for Critical Mineral Recycling

SYLLABUS

GS-3: Indigenisation of Technology and Developing New Technology; Environmental Pollution and Degradation. 

Context: 

Recently, the Union Cabinet approved the ₹1,500 Crore Incentive Scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources.

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  • The incentive scheme is part of the National Critical Mineral Mission (NCMM).
  • The Scheme aims to promote recycling of e-waste, lithium-ion battery (LIB) scrap, and catalytic converters from end-of-life vehicles. 
  • It will be implemented over six years (FY 2025–26 to FY 2030–31) as a near-term measure to secure critical minerals, given the long gestation period of mining and exploration projects.
  • Both large, established recyclers, as well as small, new recyclers (including start-ups), for whom one-third of the scheme outlay has been earmarked, will benefit from the scheme.

Key Features of the Scheme

  • The Scheme will provide an incentive for the recycling value chain, which is involved in the actual extraction of critical minerals, and not the value chain involved in only black mass production.
  • Incentives include a 20% capital expenditure subsidy for the timely commissioning of plant, machinery, and associated utilities, and an operational expenditure subsidy linked to incremental sales, disbursed in two phases—40% in the second year and 60% in the fifth year.
  • A cap of ₹50 crore per entity for large recyclers and ₹25 crore for small recyclers has been set, with further limits on Opex subsidy at ₹10 crore and ₹5 crore, respectively.
  • The scheme will support new recycling units as well as expansion, modernisation, and diversification of existing units.
  • Expected outcomes of the scheme include developing 270 kilo tons of annual recycling capacity, producing 40 kilo tons of critical minerals annually, attracting around ₹8,000 crore in investments, and creating nearly 70,000 direct and indirect jobs.
  • The move is aligned with India’s broader goals of ensuring supply chain resilience, promoting circular economy practices, and reducing dependence on imports of critical minerals essential for energy transition and advanced technologies.

National Critical Mineral Mission (NCMM/CMM)

  • Launched in January 2025 for a period of seven years from 2024-25 to 2030-31, the NCMM aims to secure the supply of critical minerals for India’s industrial, energy, and security needs.
  • The mission encompasses all stages of the value chain, including mineral exploration, mining, beneficiation, processing, and recovery from end-of-life products.
  • It aims to create a fast-track regulatory approval process for critical mineral mining projects. 
  • The mission offers financial incentives for critical mineral exploration
  • The Ministry of Mines is the is the nodal ministry overseeing NCMM.

What are Critical Minerals? 

• Critical minerals are those minerals that are essential for economic development and national security.

• The “Criticality” combines a comparatively high economic importance with a comparatively high risk of supply disruption.

• The Ministry of Mines has released a list of 30 critical minerals for India in 2023.

• These minerals are Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Graphite, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, platinum group elements (PGE), Phosphorous, Potash, rare earth elements (REE), Rhenium, Silicon, Strontium, Tantalum, Tellurium, Tin, Titanium, Tungsten, Vanadium, Zirconium, Selenium and Cadmium.

  • The platinum group elements (PGE) consist of platinum (Pt), palladium (Pd), rhodium (Rh), ruthenium (Ru), osmium (Os) and iridium (Ir).
  • The rare earth elements (REE) consist of 17 silvery-white soft heavy metals Lanthanum (La), Cerium (Ce), Praseodymium (Pr), Neodymium (Nd), Promethium (Pm), Samarium (Sm), Europium (Eu), Gadolinium (Gd), Terbium (Tb), Dysprosium (Dy), Holmium (Ho), Erbium (Er), Thulium (Tm), Ytterbium (Yb), Lutetium (Lu), Scandium (Sc), and Yttrium (Y).

• These critical minerals play a pivotal role in the manufacturing of cutting-edge technologies, including mobile phones, tablets, electric vehicles, solar panels, wind turbines, fiber optic cables, as well as applications in the defence and medical sectors.

• While critical minerals are found in large extents across the globe, extracting and refining them is costly, technically difficult and energy intensive. 

• China dominates the entire value chain in terms of processing these critical minerals. 

• India heavily relies on China for the import of Critical minerals.

Sources
Business-Standard
Pm India
Mines

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