Rare earth firms likely to get grants, speedy clearances

Companies ready to mine and refine rare earth elements may get grants and easy clearances as India tries to counter China's supply restrictions, two people with knowledge of the development said.

- Subhash Narayan & Rituraj Baruah

The measures include grants—or viability gap funding (VGF)—easing of the regulatory framework and fast-tracking auctions of rare-earth mines and acquisitions to counter the curbs imposed by China on sales of rare earth magnets and minerals, they said.

"The government aims to achieve a 10% share of global rare earth processing within the country in the coming years. VGF, incentives for refining and regulatory easing are part of the broader strategy to achieve that target," one person said.

The Indian government and industry are exploring ways to reduce reliance on China for these elements that go into several electronic components, particularly motors that drive electric vehicles. China imposed export restrictions on its rare earth minerals and magnets in April amid the trade and tariff war between the US and other nations.

VGF provides financial support to infrastructure projects developed under public-private partnerships that may not be commercially viable. As much as 40% of the total project cost is provided—a maximum of 20% each by the Central and state government.