Government-owned IREL (India) Ltd will supply raw materials to private companies under the government’s upcoming Rs 7,300-crore programme for manufacturing rare earth magnets, officials told Moneycontrol.
IREL, the only company in the country that can manufacture rare earth permanent magnets (REPMs), which are used in consumer electronics, electric vehicles to military equipment, is also likely to bid for the scheme to avail financial support.
The company, which works under the Department of Atomic Energy, has built an exclusive plant for REPMs based on indigenous technology in Andhra Pradesh’s Visakhapatnam. It is waiting for the board’s nod to start commercial production.
“Neodymium-praseodymium (NdPr), an alloy of two rare earth elements, is needed to make REPMs. Currently, IREL is the only company which makes NdPr at a relatively large scale. Hence, once the scheme is out, IREL has been asked to supply NdPr to certain categories of the selected bidders,” one of the officials cited above said on condition of anonymity.
IREL produces around 500 tonnes of NdPr oxide a year, enough for roughly 1,500 tonnes of sintered REPMs. These 500 tonnes are likely to be spread out between the L1, L2 and L3 beneficiaries of the scheme, while the L4 and L5 beneficiaries will have to source the entire quantum of NdPr since their plants will be fully integrated units.
IREL did not respond to Moneycontrol’s queries.
A first-of-its-kind initiative, the Rs 7,300-crore scheme aims to set up a fully indigenous REPM manufacturing ecosystem, with an annual production capacity of up to 6,000 tonnes to meet India’s domestic demand.
The scheme is expected to run for seven years, officials said.
Earlier this month, the finance ministry's expenditure finance committee (EFC) cleared the scheme, which will soon be tabled before the cabinet.
The move comes after China, the world’s dominant supplier, imposed export restrictions in April this year on seven rare earth elements and finished magnets.
Earlier this month, Beijing escalated its export controls, building on the curbs it imposed in April.
Permanent magnets derived from rare earth elements are considered vital for producing power windows, speakers, and propulsion systems in electric vehicles, and generators in renewable energy infrastructure, among others.
A second government official said the IREL is also likely to bid for the scheme, as it is looking for financial incentives to scale up production of REPMs.
Before the scheme is rolled out, the government is nudging the private sector to develop critical mineral processing capabilities.
India imports almost all of its rare earth permanent magnet needs. Government estimates place the domestic demand of REPMs at around 4,010 tonnes a year, expected to almost double to 8,220 tonnes by 2030.
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