Reliance, Vedanta join pre-bid talks with govt for $780-mn rare earth scheme

rare earth magnets critical for automobile, defence, electronics and wind energy sectors, among others.The scheme received the Union Cabinet's assent on 26 November last year, following which interested parties have begun consultations with the government. The scheme’s target is to create a magnet making capacity of 6,000 tonnes per annum in India."The government's benchmark is that ₹1,000 crore investment will be needed for 1,200 tonnes of magnet making capacity.

There are concerns around matching pricing of Chinese magnet imports. During discussions, it was conveyed that some protection will be needed from Chinese imports.

Moreover, the government has to back serious players instead of letting some undercut on the basis of pricing," the executive cited earlier said on the condition of anonymity."We welcome the ministry of heavy industries' forward-looking scheme to promote rare earth permanent magnet manufacturing, a crucial component for industries like EV, aerospace, defence, and consumer electronics. We are assessing the opportunity as this initiative aligns with our focus on critical minerals and presents a horizontal expansion opportunity" a Vedanta spokesperson said.Queries emailed to the ministry of heavy industries, Reliance Industries, Proterial, Sona Comstar, and Larsen & Toubro did not elicit an immediate response.The scheme will provide capital incentives worth ₹750 crore to five rare earth magnet-making plants to be constructed in two years, followed by sales-linked incentives worth ₹6,530 crore for five years after that.The scheme was designed to reduce India's dependence on China for rare earth magnets.