Govt may call bids for rare earth facilities by January end

India plans to call bids by January for setting up manufacturing facilities for rare earth permanent magnets (REPMs) under a ₹7,280-crore incentive scheme, officials said.

The government will notify the scheme this month and soon start pre-bid consultations, they said.


"We are hoping to call bids by January-end," a senior official told ET. The scheme's draft guidelines would be put up for stakeholder comments before notification, the official said.

India is seeking to achieve self-reliance in manufacturing of permanent rare earth magnets, vital to meet rapidly growing demand from sectors such as electric vehicles, renewable energy, electronics, aerospace, and defence.

The scheme, approved by the Union cabinet in November, was firmed up after extensive consultations with stakeholders involved in the permanent magnet supply chain. It aims to establish 6,000 metric tonnes per annum of integrated REPM manufacturing in the country.

The official said indigenous technology for REPM manufacturing has been developed under a dedicated programme run by the Department of Science and Technology.

To tie-up raw material supplies, the Centre is in talks with several suppliers of rare earth oxides from South America, Africa, the UK, and Australia who have offered to supply these chemical compounds.

A tonne of rare earth oxide can be used for producing about three tonnes of permanent magnets, essential for electric vehicle (EV) motors besides new-age electronics.

New Delhi wants to ensure a steady supply of REPMs after a clamp down on exports by Beijing, its largest supplier, caused an acute shortage of rare earth magnets.

Although China has since allowed conditional exports, the government is keen on developing local manufacturing capabilities to ensure self-sufficiency and cut dependence on supplies from a single source.

The domestic industry has also expressed keenness to participate in the scheme though it has flagged worries over sourcing of capital goods from China. The government, however, sought to alleviate the concerns, saying there were alternatives available.

"That will not be an issue since manufacturing equipment can be sourced from Japanese, South Korean, or European suppliers," said the official cited above.