The UnionCabinet chaired by the Prime Minister, Shri Narendra Modi, has approved anincentive scheme worth INR1,500-crore for developing recycling capacity forsegregation and production of essential minerals from secondary sources in the country.The scheme is part of the National Essential Minerals Mission (NCMM), aimed atbuilding domestic capacity of essential minerals as well as enhancing theflexibility of the supply chain.

The essentialmineral value chain, which includes exploration, auction, and mining as well asacquisition of foreign assets, has a gap period before supplying essentialminerals to Indian industries. A prudent way to ensure sustainability is torecycle secondary resources.

The scheme willhave a period of six years – from FY 2025-26 to FY 2030-31. Eligible feedstockincludes e-waste, lithium-ion battery (LIB) scrap, and scrap other than e-wasteand LIB scrap, for example, catalytic converters in end-stage vehicles. Therewill be established recyclers as well as small, new recyclers (includingstart-ups), for whom one-third of the plan’s funds have been reserved.

The scheme willbe applicable for investment in new units as well as capacityexpansion/modernization and diversification of existing units. The scheme willprovide incentive funding not only for the value chain involved in theproduction of black mass but also for the recycled value chain involved in theactual extraction of essential minerals.

Incentivesoffered under the Plan include a 20 per cent capex subsidy on plants andmachinery, equipment, and related utilities to start production within aspecified period, beyond which a lower subsidy will be applicable; and OPEXgrants, which will be an incentive on incremental sales from the base year (FY2025-26) i.e. 40 per cent of eligible OPEX grants in the second year and theremaining 60% per cent if certain incremental sales limits are reached in thefifth year from FY 2026-27 to FY 2030-31.

To ensuremaximum number of beneficiaries, the total incentive per institution (capitalplus OPEX grant) will be a maximum limit of INR50-crore for large institutionsand INR25-crore for small institutions, with the maximum limit of OPEX grantbeing INR10-crore and INR5.00-crore, respectively.

In terms ofmajor outcomes, the scheme's incentives are expected to develop at least 270kilo tonnes of annual critical mineral production, which will result in aninvestment of about INR8,000-crore and creation of about 70,000 direct and indirectjobs.