Rare Earths & Permanent Magnets

IREL (India) Limited, formerly Indian Rare Earths Limited, was incorporated on 18 August 1950, and its Rare Earths Division at Aluva in Kerala began operating in 1952. Monazite, India's main rare earth ore, contains uranium and thorium, so it is a prescribed substance whose mining, processing and refining are kept under Government control. IREL commissioned a Rare Earth Extraction Plant in Odisha with installed capacity of 11,200 tonnes a year of mixed rare earth chlorides in 2015-16. In December 2022 the Government told the Lok Sabha that monazite production was around 4,000 tonnes a year, against IREL's installed capacity to process about 10,000 tonnes, and that output was capped by pending mining leases and clearances.

On 26 November 2025 the Union Cabinet approved the Scheme to Promote Manufacturing of Sintered Rare Earth Permanent Magnets with an outlay of ₹7,280 crore: ₹6,450 crore of sales-linked incentives on magnet sales for five years and ₹750 crore of capital subsidy. The scheme aims at 6,000 tonnes a year of integrated capacity, covering the conversion of rare earth oxides to metals, metals to alloys and alloys to finished magnets, to be shared among five beneficiaries. The Cabinet release said these would be India's first integrated rare earth permanent magnet manufacturing facilities. The Ministry of Heavy Industries notified the scheme on 15 December 2025.

Beneficiaries are chosen through global competitive bidding under a Least Cost System with separate technical and financial bids, and each is allotted between 600 and 1,200 tonnes a year of capacity. The scheme runs for seven years from the award: a two-year gestation period to set up the plant, then five years of incentives linked to magnet sales. The three lowest bidders get limited assured supply of NdPr (neodymium-praseodymium) oxide from IREL, which refines rare earth oxides at Aluva. The Ministry of Heavy Industries released the tender on 20 March 2026, extended the bid deadline to 12 August 2026, and received 20 bids, whose technical bids were opened on 13 August 2026.

The Government attributes India's dependence on imported magnets to lean ore grades of 0.056%–0.058% tied with radioactivity, limits on mineable reserves from coastal regulation, mangroves, forests and habitation, and few midstream industries making metals, alloys and magnets. India's magnet requirement of about 4,000 tonnes is projected to reach nearly 8,000 tonnes by 2030, the Minister of State for Science & Technology told the Lok Sabha in March 2026. The Union Budget 2026-27 announced Rare Earth Corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu, and a samarium-cobalt magnet plant for strategic sectors has been made operational at Visakhapatnam. The National Critical Mineral Mission, approved on 29 January 2025, also covers rare earths; mineral block auctions and the Mission are covered on the Critical Minerals page.

₹7,280 crore magnet scheme (₹6,450 crore incentives, ₹750 crore capital subsidy). 6,000 tonnes a year of integrated magnet capacity targeted; 20 bids received (August 2026). 7.23 million tonnes of rare earth oxide in 13.15 million tonnes of monazite, plus 1.29 million tonnes in hard rock (AMD, January 2026). 59.6%–81.3% by value of permanent magnet imports sourced from China (2022-23 to 2024-25). 11,200 tonnes a year of mixed rare earth chloride capacity at IREL's Odisha plant. Sources: Ministry of Heavy Industries, Department of Atomic Energy and Ministry of Mines via PIB (PRIDs 1883492, 2147282, 2194684, 2204625, 2220295, 2222902, 2242811, 2245038, 2248182, 2291188, 2299078; Press Notes 156753 and 157165); IREL (India) Limited.