The Union Cabinet has approved a Rs 15 billion incentive scheme to promote critical mineral recycling in the country. As a part of the National Critical Mineral Mission, the scheme aims to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources.
According to the scheme, the eligible feedstock includes e-waste, lithium-ion battery (LIB) scrap, and scrap other than e-waste and LIB scrap, such as catalytic converters in end-of-life vehicles. The scheme is designed to benefit both large, established recyclers as well as small, new recyclers, including start-ups. Additionally, one third of the scheme outlay has been earmarked for small, new recyclers. The scheme will provide an incentive for the recycling value chain, which is involved in the actual extraction of critical minerals, and not the value chain involved in only black mass production.
Furthermore, the scheme offers a 20 per cent capex subsidy on plant and machinery, equipment, and associated utilities for starting production within a specified timeframe, beyond which a reduced subsidy is applicable. It also offers an opex subsidy, which will be an incentive on the incremental sales over the base year of the financial year (FY) 2025-26, viz. 40 per cent of the eligible opex subsidy in the second year and the balance 60 per cent in the fifth year from FY 2026-27 to FY 2030-31 on achievement of the specified threshold incremental sales.
To ensure a greater number of beneficiaries, the total incentives of the scheme (including both capex and opex subsidy) provided to each entity will be capped at Rs 0.5 billion for large entities and Rs 0.25 billion for small entities, within which there will be a ceiling for opex subsidy of Rs 0.1 billion and Rs 0.05 billion, respectively.
The incentives under the scheme are anticipated to develop an annual recycling capacity of at least 270 kilo tonnes, resulting in around 40 kilo tonnes of annual critical mineral production. This will attract approximately Rs 80 billion of investment. The tenure of the scheme will be six years from FY 2025-26 to FY 2030-31.
