In the Union Budget 2026–27, the Union Government proposed the establishment of dedicated Rare Earth Corridors in the coastal States of Odisha, Kerala, Andhra Pradesh and Tamil Nadu.
Rare Earths in India
- Primary Source: In India, Beach Sand Minerals (BSM) are the principal source of rare earth elements.
- Monazite Presence: BSM contains monazite, a phosphate mineral rich in rare earth elements such as neodymium and praseodymium, along with Uranium and Thorium, making it a strategic substance.
- Strategic Importance: Rare earths are classified as critical minerals due to their essential role in advanced technologies and national security.
- Monazite is regulated under the Atomic Energy Act, 1962, due to the presence of radioactive elements.
About Rare Earth Magnets
- Rare-earth permanent magnets are the strongest type of permanent magnets commercially available.
- They are made from alloys of rare-earth elements (a group of 17 metals on the periodic table) combined with other elements like iron and boron
- Properties: Very high magnetic strength, high energy density, compact size, superior to ferrite/alnico.
- Limitations: Brittle, corrosion-prone and usually nickel-plated or coated.
- Types of Rare Earth Magnet
- Neodymium-Iron-Boron (Nd-Fe-B)
- Strongest permanent magnet.
- Composition: Neodymium, Iron, Boron.
- Limitations: Sensitive to heat and corrosion.
- Widely used in EVs and wind turbines
- Samarium-Cobalt (Sm-Co)
- Slightly weaker than Nd-Fe-B but more stable.
- Composition: Samarium, Cobalt.
- Advantages: High resistance to heat (up to ~350°C) and corrosion.
- Limitation: More expensive
- Used in aerospace and defence applications.
State-wise Rare Earth Locations
- Odisha: The Chhatrapur (OSCOM) region has the highest current level of rare earth processing activity.
- Andhra Pradesh: Notable deposits are found along the coast in Srikakulam, Visakhapatnam, and Nellore
- Tamil Nadu: Rich beach sand zones are present in Manavalakurichi and southern coastal districts.
- Kerala: Significant reserves are located at Chavara and near Vizhinjam Port.
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Key Features of the Scheme
- Integrated Corridor Model: Mining, separation, processing, R&D, and manufacturing facilities will be co-located to reduce logistics costs and accelerate technology transfer.
- Magnet Manufacturing Linkage: The corridors are aligned with the ₹7,280 crore Sintered Rare Earth Permanent Magnet (REPM) Scheme, which targets 6,000 MTPA domestic magnet capacity.
- Policy Linkages: The initiative builds upon the National Critical Minerals Mission and the Magnet Manufacturing Scheme.
- State-Led Industrialisation: Execution will be anchored by state governments, shifting the focus from purely national policy to state-driven value addition and industrial clustering
- Manufacturing Capacity Target: Support for 6,000 metric tonnes per annum (MTPA) of integrated REPM manufacturing capacity.
- Beneficiary Allocation: Five beneficiaries selected through competitive bidding, each eligible for up to 1,200 MTPA capacity
- Financial Incentives:
- Sales-linked incentives: ₹6,450 crore over five years
- Capital subsidy: ₹750 crore for setting up integrated facilities
Strategic Importance of Rare Earth Permanent Magnets (REPMs)
- Key Applications: Electric vehicles, renewable energy systems, electronics, aerospace, and defence technologies.
- Global Supply Concentration: China controls over 90 per cent of global rare earth processing and REPM manufacturing.
- Supply Chain Vulnerability: Over-dependence on imports poses risks to energy transition, defence preparedness, and industrial growth.
- India’s Demand-Supply Scenario:
- Rising Demand: Demand for REPMs is increasing due to EV adoption and renewable energy expansion.
- Import Dependence: India imported over 53,000 metric tonnes of rare earth magnets in FY 2024–25.
- Future Projections: Domestic consumption of REPMs is expected to double by 2030, with most demand currently met through imports
3 Feb 2026
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