The rare earth crisis continues to brew as automobile manufacturers scramble to the government for a long-term solution. According to CNBC-TV18, the Prime Minister’s Office (PMO) is likely to hold a high-profile meeting with various departments from different sectors to find a solution to the serious shortage of rare earth magnets. This severely affects the automobile sector, including electric vehicles, hybrids and regular internal combustion engines, as these materials are crucial components like electric motors, sensors, automatic transmission kits and power steering systems.
Sources have told CNBC-TV18 the PMO meeting will include departments like the Department of Heavy Industries (DHI), the Ministry of Commerce, and the Ministry of Mines. The meeting is expected to discuss the recently proposed Rs 1,345 crore incentive scheme for the domestic production of rare earth magnets.
Rare earth incentive programme: What is it?
The central government has recently unveiled an incentive programme to enhance the domestic production of rare earth magnets. The Rs 1,345 crore scheme aims to reduce the country’s reliance on China, which has a 90% monopoly on processing rare earth materials and manufacturing magnets. Furthermore, the scheme is to provide incentives for state-owned and private companies that want to invest in the process and the production of rare earth magnets, as well as the entire supply chain. PTI had earlier reported that the Ministries of Heavy Industries and Mines were in the process of finalising guidelines for this scheme.
Speaking to PTI, Kamran Rizvi, Secretary at the Ministry of Heavy Industries, confirmed that the draft plan for the rare earth magnet has been sent for other concerned departments for consultation and will then be forwarded to the Union Cabinet for approval.
Availability of rare earth in India
Not many people may know this, but India has the fifth-largest rare earth material deposit in the world. The issue the country is currently facing is that only India Rare Earths Limited (IREL) holds the monopoly in this sector and lacks the technology and the infrastructure to produce on a mass-market level.
With the recent announcement of the rare earth incentive scheme, global parts supplier Sona BLW Precision Forgings and component maker Uno Minda have shown interest in investing in domestic production facilities.
