Lithium and nickel processing: Centre to pay 30% of the cost of four plants under a Rs 2,814 crore scheme

The Centre will pay 30% of the capital cost of four new plants that turn lithium and nickel ore into battery-grade material, under a Rs 2,814 crore lithium and nickel processing scheme that the Union Cabinet approved on Wednesday, 4 November. The scheme runs from 2026-27 to 2030-31, and the government expects it to pull in about Rs 10,000 crore of investment, it said in a backgrounder on Thursday, 5 November.

Two of the plants will handle lithium and two will handle nickel. Each lithium unit must be able to process at least 30,000 tonnes and each nickel unit at least 50,000 tonnes. The lithium plants will work on ores and concentrates, not brine, and turn out battery-grade products. The nickel plants will make Class-1 nickel or battery-grade nickel sulphate and recover cobalt as a by-product.

The lowest subsidy bid wins

Support is capped at Rs 500 crore for each lithium project and Rs 900 crore for each nickel project; Rs 14 crore is kept for administration. Applicants will first be screened on technical grounds. Those who clear that round will bid, and in each mineral the two companies asking for the least support will be chosen.

The money comes in three instalments tied to spending and equity: a quarter of the bid amount after 25% of the committed capital is spent, half at 50%, and the rest when the plant is commissioned. A plant should be running three years after the award is issued and must be running by the fifth year; for any delay past year three, the unpaid subsidy shrinks.

Rare earths, not lithium, for Andhra Pradesh

India imports most of the refined, high-purity forms of these minerals that makers of electric vehicles, battery storage, electronics, defence equipment and speciality steel need, the government said. The four plants are meant to add 60,000 tonnes of lithium and 100,000 tonnes of nickel processing capacity by 2030.

The scheme does not say where the plants will be built. Mines Secretary Keshav Chandra has told an industry meeting of the Federation of Indian Mineral Industries (FIMI) that the Centre is developing four critical mineral processing parks, each built around one mineral: Maharashtra for lithium, Odisha for nickel, and Gujarat and Andhra Pradesh for rare earths. He said Andhra Pradesh had also been picked for a rare earth corridor.

Rajat Verma, founder and chief executive of LOHUM, said his company already processes both metals and welcomed the decision. A Governing Council headed by the Mines Secretary will pick the four companies and sanction their subsidy, on the advice of a techno-financial committee.