➔ CAPEX Support Scheme for Critical Mineral Processing (UPSC/RAS/PSI)

Nodal Ministry- Ministry of Mines, Government of India
Cabinet Approval & Implementation Period- Approved on November 4, 2026; operational from FY 2026–27 to FY 2030–31.
Total Financial Outlay- ₹2,814 crore (Fully funded through budgetary support from the Government of India).

Importance of Critical Minerals- Critical minerals are indispensable for clean energy technologies, electric mobility, advanced electronics, telecommunications, aerospace, and defense applications.
Global Supply Chain Vulnerabilities- The extraction and processing of critical minerals are geographically concentrated in a few foreign nations, exposing global supply lines to geopolitical tensions, price volatility, and export restrictions.
India's Identification Framework- India has identified 24 critical minerals including lithium, nickel, cobalt, graphite, and rare earth elements to support its long-term commitment to achieving net-zero emissions by 2070.
The Domestic Processing Deficit- While India has initiated mineral block auctions, its requirements for high-purity refined intermediates and battery-grade materials have historically been met largely through imports.
Bridging the Value Chain Gap- The scheme provides targeted capital expenditure support to establish domestic processing facilities, transforming raw ores/concentrates into battery-grade products.
Core Strategic Goal- Designed to reduce external import dependence, insulate domestic industries from supply disruptions, and accelerate the Atmanirbhar Bharat (self-reliant India) vision.

Financial Outlay, Plant Capacity & Subsidy Structure

Total Outlay Allocation- ₹2,814 crore, out of which ₹2,800 crore is dedicated to capital subsidies and ₹14 crore (0.5%) is set aside for administrative expenses.
Target Minerals & Plant Quotas- Provides a 30% capital subsidy on eligible investments to establish four commercial processing plants-

2 Lithium Processing Plants- Minimum capacity of 30,000 tonnes each (converting ores/concentrates into battery-grade products, excluding brines).

2 Nickel Processing Plants- Minimum capacity of 50,000 tonnes each (producing Class-1 nickel or battery-grade nickel sulphate, along with cobalt recovery).

Per-Beneficiary Subsidy Caps- Financial support is capped at ₹500 crore per Lithium beneficiary and ₹900 crore per Nickel beneficiary (totaling ₹1,000 crore for lithium and ₹1,800 crore for nickel).
Capital Cost Viability- Targeted subsidies offset the high upfront capital costs, complex multi-stage conversion requirements, and strict environmental safeguards needed for commercial viability.

Stage-1 (Technical Qualification)- All applicant proposals are subjected to rigorous technical evaluation against pre-determined criteria; only qualified applicants advance to financial bidding.
Stage-2 (Financial Bidding & Least-Cost Criterion)- Qualified bidders submit financial bids, and beneficiaries are selected based on the least-cost criterion (seeking the lowest capital subsidy support).
Total Beneficiaries- Exactly four beneficiaries are chosen (two for lithium and two for nickel).
Milestone-Linked Tranches- Capital subsidies are disbursed in three structured tranches linked directly to financial and physical progress-

Tranche 1 (25% Subsidy)- Upon spending 25% of committed CAPEX and contributing at least 15% of minimum required equity.

Tranche 2 (50% Cumulative Subsidy)- Upon spending 50% of committed CAPEX and contributing at least 50% of minimum required equity.

Tranche 3 (100% Cumulative Subsidy)- Upon successful plant commissioning and contributing 100% of minimum required equity.

Commissioning Timelines- Plants must be commissioned within 3 years of receiving the Letter of Award (LoA), with an outer limit of 5 years (delays past year 3 trigger a tapering penalty on undisbursed funds).

Apex Body (Governing Council)- Chaired by the Secretary, Ministry of Mines; provides strategic guidance, reviews progress, makes final beneficiary selections, and sanctions CAPEX support.
Evaluation Body (Techno-Financial Committee)- Composed of technical and financial experts from R&D institutions, technical bodies, and PSUs to evaluate applications and recommend qualified bidders.
Implementation Agency (Project Management Agency)- Provides dedicated secretarial, managerial, and operational implementation support to the Ministry of Mines.
Inter-Ministerial Alignment- Ensures coordination with related industrial ministries (Heavy Industries, New and Renewable Energy, Steel) to align domestic processing outputs with downstream manufacturing demand.
Transparent Monitoring- Digital tracking mechanisms monitor fund utilization against milestone deliverables to prevent implementation slippages.

Catalyzing Private Investment- The ₹2,814 crore government push is projected to anchor approximately ₹10,000 crore in total industrial processing investment.
Capacity Creation by 2030- Establishes domestic processing capacity of 60 kt for Lithium and 100 kt for Nickel, fulfilling projected national manufacturing demand.
Upgrading Domestic Value Addition- Shifts India's role from exporting raw ores or importing refined chemicals to capturing high-value processing stages domestically.
Foreign Exchange Savings- Local production of high-purity battery intermediates substitutes expensive imports, directly reducing the national import bill.
Synergy with Downstream Schemes- Refined materials feed directly into existing Production Linked Incentive (PLI) schemes for Advanced Chemistry Cell (ACC) battery storage, electric vehicles (EVs), and speciality steel.
Employment Multipliers- Generates significant direct and indirect engineering and operational jobs in high-tech mineral processing and downstream manufacturing.

National Critical Mineral Mission (NCMM)- Launched in January 2025 to secure long-term mineral supplies, complemented by a ₹1,500 crore recycling scheme (approved September 2025) to recover minerals from e-waste and spent lithium-ion batteries.
Aggressive Mineral Block Auctions- The Central Government has maintained steady momentum in mineral asset monetization, successfully auctioning 64 critical and strategic mineral blocks alongside 11 Exploration Licence blocks.
Holistic Value Chain Coverage- Current policies comprehensively span the entire mineral lifecycle from geological exploration and sustainable mining to domestic refining, advanced processing, and urban recycling.
Global Collaborations- Aligns with international partnerships (such as the Minerals Security Partnership) to diversify raw material sourcing while simultaneously building indigenous refining muscle.

Strategic Autonomy- Ensures that India's green energy transition remains immune to geopolitical chokeholds on refined battery precursors.

Source:PIB