Critical Mineral Processing Scheme: Cabinet Approves ₹2,814 Crore for Domestic Lithium and Nickel Processing

The Union Cabinet, led by Prime Minister Narendra Modi, approved the Capex Support Scheme to Promote Critical Mineral Processing worth ₹2814 crores on 4 th November 2026. This scheme will run from FY 2026-27 to FY 2030-31. It seeks to create processing infrastructure for lithium and nickel at home. There will be capital expenditure support provided to set up 4 processing plants for these minerals, helping reduce reliance on imports and develop a strong value chain for critical minerals in India.

Critical Mineral Processing Scheme Objectives

To create processing infrastructure for critical minerals in India.

The main objectives are,

• Reduce reliance on imports by creating processing infrastructure in India for processing lithium and nickel ores and intermediates into high purity compounds.
• Create value addition in India.
• Reduce reliance on a global supply chain reducing the risk of disruptions due to geopolitical issues, fluctuating international prices and potential supply constraints.
• Provide materials for strategic industries such as electric mobility, battery energy storage, electronics, defence and speciality steel.
• Allow recovery of cobalt.
• Support atmanirbhar Bharat by creating reliable infrastructure in India across the value chain for critical minerals.

Financial Support and Plant Capacity

There will be a capital grant of 30% of eligible investment to create 4 critical mineral processing plants.

Aspect	Lithium Processing	Nickel Processing
Plants	2	2
Min Plant Capacity (kt)	30	50
Capital Grant	30%	30%
Max Capital Support (Crore)	500	900

This is the maximum capital support that can be received by each beneficiary. The total amount of money allocated for this scheme is ₹2814 crores over 5 years.

How Beneficiaries Will Be Chosen and How Incentives Will Be Paid

The government will choose beneficiaries through a 2 stage process.

Technically Qualified: Applications will be reviewed to ensure they are technically qualified.

Financial Bid: Technically qualified applicants will then participate in a financial bid. Beneficiaries will be chosen (2 for each mineral) based on lowest cost. Therefore those who want the lowest capital support will win.

The incentives will be paid in 3 stages.

What Are Critical Minerals?

Critical Minerals are natural minerals that are crucial for economic development, industrial applications, national security and new technologies. They are vulnerable to disruption due to their limited geographical distribution and concentration of processing.

Lithium, Nickel and Cobalt are important for battery manufacturing.

Main Uses of Targeted Minerals

• Lithium – Rechargeable batteries for EVs, Smartphones and Energy Storage.
• Nickel – Stainless Steel and some Li-ion Battery chemistries.
• Cobalt – Rechargeable batteries, superalloys and other industrial uses.

Under this scheme, ores/intermediates of Lithium and Nickel will be processed into high purity compounds. Cobalt can also be recovered as a by-product.

India’s Critical Mineral Strategy

India sees Critical Minerals as a vital resource.

A list of 30 critical minerals was published by the Ministry of Mines in July 2023. This was after analysing the importance of these minerals to our economy, vulnerability to disruption, import dependency and importance to new technologies.

The list includes,

No.	Critical Minerals
1-5	Antimony, Beryllium, Bismuth, Cobalt, Copper
6-10	Gallium, Germanium, Graphite, Hafnium, Indium
11-15	Lithium, Molybdenum, Niobium, Nickel, Platinum Group Elements (PGE)
16-20	Phosphorus, Potash, Rare Earth Elements (REE), Rhenium, Silicon
21-25	Strontium, Tantalum, Tellurium, Tin, Titanium
26-30	Tungsten, Vanadium, Zirconium, Selenium, Cadmium

National Critical Mineral Mission (NCMM)

The National Critical Mineral Mission was approved by the Union Cabinet on the 29th January 2025.

The mission will aim to strengthen critical mineral supply chains in India. This will be done by carrying out exploration, mining, concentration, processing and recycling of critical minerals. It will also acquire critical minerals assets abroad.

This supports the new capital support scheme by focussing on developing reliable infrastructure in India across the critical mineral value chain. Digital Sansad +1