Govt Approves ₹1,500 Cr Scheme for Mineral Recycling

Union Cabinet chaired by Prime Minister Narendra Modi approved a major policy intervention by clearing a ₹1,500 crore incentive scheme to develop India’s capacity for critical mineral recycling. This move falls under the ambit of the National Critical Mineral Mission (NCMM) and is aimed at strengthening supply chain resilience, reducing import dependence, and building domestic capacity for critical mineral production from secondary sources such as e-waste and battery scrap.

About the Incentive Scheme

Objective and Scope

The scheme is designed to promote the extraction of critical minerals—such as lithium, cobalt, and rare earth elements—from recyclable sources, helping to bridge the supply gap while new mining and exploration projects are still under development.

It specifically targets,

• E-waste
• Lithium-ion battery (LIB) scrap
• Other scrap such as catalytic converters from end-of-life vehicles

Scheme Tenure

• Duration: 6 years
• Operational period: FY 2025–26 to FY 2030–31

Who Can Benefit?

The scheme aims to support both,

• Large, established recycling companies
• Small, new entrants and start-ups (with one-third of the total ₹1,500 crore outlay reserved for them)

It will fund,

• New units
• Capacity expansion
• Modernization and diversification of existing recycling facilities

However, only those engaged in actual mineral extraction from waste—not just black mass production—will be eligible.

Subsidy Structure

Capex Subsidy

• 20% subsidy on capital expenditure for setting up eligible recycling units
• Applicable to machinery, plant, and associated utilities
• Reduced subsidy if production begins after the stipulated timeframe

Opex Subsidy

• Based on incremental sales over the base year (FY 2025–26)
• 40% subsidy of eligible operational expenditure in Year 2
• Remaining 60% in Year 5, upon reaching set sales thresholds
• Opex incentives span from FY 2026–27 to FY 2030–31

Incentive Caps

• Large entities: Max total subsidy of ₹50 crore (including ₹10 crore Opex cap)
• Small entities: Max total subsidy of ₹25 crore (including ₹5 crore Opex cap)

Important Takeaways for Exam

What are Critical Minerals?

• Critical minerals are essential for modern technologies and national security.
• They face supply chain risks due to limited availability or geographical concentration.
• Their ‘criticality’ changes over time based on technology trends and supply-demand dynamics.