Rare earths sector can do with recycling thrust

Budget 2026-27 reaffirmed that rare earths remain a focus area for the government.

- Pranay Kotasthane and Tannmay Kumarr Baid

EV motors contain large quantities of rare-earth magnets.

(REUTERS)

EV motors contain large quantities of rare-earth magnets.

Finance minister Nirmala Sitharaman spoke of supporting dedicated rare earth corridors in states where monazite-rich coastal beach sands are found. These hold an estimated 7.23 million tonnes of rare-earth oxides.

The announcement carries forward two ongoing projects. The Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnet, announced in November 2025 with an outlay of 27,280 crore, seeks to incentivise the full supply chain from rare-earth oxides to finished magnets. It works alongside the National Critical Mineral Mission (NCMM), which focuses on mining, refining, and recycling critical minerals, including rare earths.

The focus on mining, processing, and research is welcome. However, new mines and refineries will take years to materialise. For instance, despite the mention in the budget speech, no money has been budgeted for the rare-earth permanent magnet scheme this year. The scheme envisages a seven-year implementation cycle, with the first two years dedicated to constructing facilities for rare-earth magnet manufacturing. Even so, none of the ₹750-crore capital subsidy meant for the construction of these facilities has been budgeted for this year.