Context
Recently, the Union Cabinet, chaired by the Prime Minister, approved the Capex Support Scheme to Promote Critical Mineral Processing with a financial outlay of ₹2,814 crore over five years.
About the Capex Support Scheme
- Ministry: Ministry of Mines.
- Financial Outlay: ₹2,814 crore.
- Scheme Period: FY 2026–27 to 2030–31 (five years).
- Objective: To promote domestic processing facilities for critical minerals, enhance value addition and reduce import dependence.
- Target Minerals: Lithium and Nickel.
- By-product: Cobalt is also expected to be recovered during nickel production.
- Nature of Support: Capital expenditure (CAPEX) subsidy.
Major Features of the Scheme
1. Capital Subsidy
- Provides a capital subsidy of 30% of eligible investment for establishing critical mineral processing plants.
- The maximum capital support is capped at:
- Lithium: ₹500 crore per beneficiary.
- Nickel: ₹900 crore per beneficiary.
2. Establishment of Processing Plants
| Mineral | Number of Plants | Minimum Capacity |
| Lithium | 2 | 30 kt each |
| Nickel | 2 | 50 kt each |
3. Selection of Beneficiaries
- The selection process will follow a two-stage procedure:
- Stage 1 – Technical Qualification: Applications will be assessed for technical eligibility.
- Stage 2 – Financial Bidding: Technically qualified applicants will participate in financial bidding.
- Two beneficiaries will be selected for each mineral based on the least-cost criterion, i.e., the lowest CAPEX support sought by bidders.
Significance of the Scheme
- Reducing Import Dependence: Addresses India’s dependence on imports of refined intermediates and high-purity critical mineral materials.
- Supply Chain Resilience: Reduces vulnerability to geopolitical disruptions, price volatility and potential supply restrictions.
- Domestic Value Addition: Promotes domestic beneficiation and processing instead of dependence on imported refined products.
- Strategic Sectors: Supports critical sectors such as electric mobility, Battery Energy Storage Systems (BESS), electronics, defence and speciality steel.
- Atmanirbhar Bharat: Strengthens domestic capabilities across the critical mineral value chain.
- Energy Transition: Supports India’s decarbonisation targets by strengthening the supply chain for minerals essential to clean energy technologies.
Comparative Overview of Lithium, Nickel and Cobalt
| Parameters | Lithium (Li) | Nickel (Ni) | Cobalt (Co) |
| Nature | Soft, silvery-white alkali metal | Silvery-white transition metal | Hard, silvery-grey transition metal |
| Major Properties | Lightest metal, highly reactive | Corrosion-resistant, magnetic and heat-resistant | Magnetic, corrosion-resistant and heat-resistant |
| Major Minerals/Ores | Spodumene, Lepidolite | Pentlandite, Garnierite | Cobaltite, Heterogenite |
| Major Extraction Method | Hard-rock mining and brine extraction | Sulphide and laterite mining | Recovered mainly as a by-product of copper and nickel mining |
| Major Producing Countries (2025) | Australia, Chile, China, Argentina and Zimbabwe | Indonesia, Philippines, Russia, Canada and Australia | DRC, Indonesia, Russia, Madagascar and Australia |
| Largest Producer (2025) | Australia | Indonesia | Democratic Republic of the Congo (DRC) |
| Important Geographical Region | Lithium Triangle (Argentina, Bolivia and Chile) | Southeast Asia, particularly Indonesia and Philippines | Central African Copperbelt (DRC and Zambia) |
| Applications | Glass, ceramics lubricating greases, Nuclear energy, Aerospace, Defence and Batteries | Stainless steel, electroplating, catalysts, Specialised nuclear alloys, Medical alloys and equipment | Industrial catalysts, cutting tools and blue pigments, cancer radiotherapy and medical sterilisation, High-performance alloys and magnets |
Conclusion
The Capex Support Scheme to Promote Critical Mineral Processing is an important step towards building a resilient domestic critical mineral ecosystem. By encouraging investments in lithium and nickel processing, the scheme aims to enhance domestic value addition, reduce import dependence and strengthen India’s economic and strategic security.