India approves INR 2,814 crore capex scheme for critical mineral processing

The Union Cabinet has sanctioned a capital expenditure assistance program intended to enhance the domestic processing of critical minerals. This initiative entails a total financial commitment of INR 2,814 crore, distributed across a five-year duration from FY 2026-27 through 2030-31. The scheme is structured to offer direct aid for the setup and scaling of processing units for these essential resources.

Processing Targets and By-Products

The scheme specifically targets the processing of lithium and nickel ores or intermediary products into high-purity compounds. While nickel processing is a primary focus, cobalt is expected to be recovered as a by-product of that production. These high-purity materials serve as critical inputs for several key industries, including electric mobility, battery energy storage systems (BESS), electronics, defence, and speciality steel. The approval does not specify a timeline for when the application process will begin.

Financial Structure and Plant Requirements

The scheme allocates a 30% capital subsidy on eligible investment across four mandated processing facilities.

Mineral	Required Plants	Min. Capacity (kt)	Max. Support (INR crore)
Lithium	2	30	500
Nickel	2	50	900

Selection Process and Disbursement

• Beneficiaries are identified through a two-stage evaluation: initial technical qualification followed by financial bidding.
• The final selection relies on a least-cost criterion, prioritizing applicants who require the lowest capital expenditure (CAPEX) support.
• Incentive funds are released in three distinct tranches, each contingent on the achievement of specific project milestones.
• The approval does not provide a specific list of eligible companies for the scheme.

Context and Industry Response

India still depends significantly on imported refined intermediates and high-purity materials, a reliance the new scheme seeks to reduce. Nitin Gupta, Attero Co-founder and CEO, described the approval as a "important intervention to address one of the biggest gaps" in the domestic supply chain. Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical Ltd, characterized the policy as a "landmark and transformative initiative."

Industry Strategies and Recycling Infrastructure

Nitin Gupta, Co-founder and CEO of Attero, explained that the firm’s exclusive recycling methods, supported by a portfolio of over 50 international patents, allow for the extraction of more than 20 essential minerals, achieving significant purity and high yield. He highlighted that Attero’s digital platforms, Selsmart for consumer electronics and MetalMandi for transparent scrap commerce, direct electronic waste and battery residues into regulated recycling channels, thereby securing a consistent supply of raw material for local processing. Meanwhile, Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical Ltd, outlined a corporate goal that surpasses LFP cathode production, aiming to construct a comprehensive lithium ecosystem that covers resource acquisition, extraction from hard rock and brine, as well as processing and refining. Choudhary emphasized that this regulatory framework supports Himadri’s strategy of backward integration and its drive to become a globally competitive, fully integrated player in battery materials.