India’s Rare Earth Magnet Scheme Draws Nil Bids. The 2,000-Tonne Oxide Question Is Still Open

The Ministry of Heavy Industries’ rare earth magnet scheme now has price signals. The Economic Times reported on 9 November 2026, citing officials, that Coal India and the Hyderabad-based IRP Infratech consortium, partnered with US firm BaRupOn, bid a nil per-kilogram incentive. Prozeal Green Energy, ReNew and Midwest Energy asked for ₹243 to ₹505 against a ceiling of ₹2,150. The oxide is the open question: state-owned IREL (India) Limited has committed 500 tonnes a year, against about 2,000 needed on the ministry’s own ratio.

The ratio comes from the ministry’s June response to bidders: 400 tonnes of neodymium-praseodymium (NdPr) oxide supports about 1,200 tonnes of magnet, so 6,000 tonnes of magnet capacity needs roughly 2,000 tonnes of oxide a year. The Department of Atomic Energy (DAE) told the Lok Sabha in March that IREL has committed 500 tonnes to the selected bidders. Price is the part the ministry can now see. Supply is the part it has not yet secured.

India imports all of its sintered neodymium-iron-boron (NdFeB) magnets, the Ministry of Heavy Industries (MHI) told the Lok Sabha in July. The Union Cabinet cleared a separate critical mineral processing scheme for lithium and nickel on 4 November. The rare earth magnet scheme is its counterpart for magnets, and its first numbers are now public.

What did the rare earth magnet scheme bids reveal on 9 November?

MHI said in August that it had received 20 bids, and the Economic Times reports that 16 qualified technically. Five price quotes under the rare earth magnet scheme have been reported so far: two nil bids, ₹243 a kilogram from Prozeal, ₹449 from ReNew and ₹505.05 from Midwest Energy, against a ceiling of ₹2,150. Quotes for the other 11 qualified bidders have not been reported. Five companies will be selected, up to 1,200 tonnes a year each.

The 20 bidders MHI named include Larsen & Toubro, Coal India, ReNew, Attero Recycling, Lohum Magnets & Energy Solutions, 20 Microns, Proterial (India), Prozeal Green Energy, Singapore’s NEO Performance Materials and consortia built around Midwest Energy and BaRupOn. Mining, power, engineering, recycling and magnet-making firms are all in the field.

The ceiling is ₹2,150 a kilogram. Midwest’s ₹505.05 is about 23 per cent of it, ReNew’s ₹449 about 21 per cent and Prozeal’s ₹243 about 11 per cent (TES arithmetic). The per-beneficiary cap of ₹1,290 crore for a 1,200-tonne line equals the full ceiling paid on 1,200 tonnes a year for five years. At ₹505.05 on the same volume the incentive would come to about ₹303 crore (TES arithmetic, assuming full-capacity sales).

The reports do not say why Coal India or the IRP consortium bid nil, or whether either also seeks the capital subsidy. Midwest Energy told the Economic Times that a first-phase plant of 500 tonnes a year is under commissioning, with expansion to 1,200 tonnes planned by August 2027. That is a company statement, not an MHI finding.

Selection under the rare earth magnet scheme is by a least-cost system among technically qualified bidders, so the rate per kilogram is what ranks them. MHI had not announced the five beneficiaries at the time of writing.

How is the rare earth magnet scheme built, and why did the tender take until August?

The Union Cabinet approved a ₹7,280 crore outlay on 26 November 2025: ₹6,450 crore in sales-linked incentives over five years and ₹750 crore in capital subsidy, for 6,000 tonnes a year across five beneficiaries. MHI floated the tender on 20 March 2026 and moved the bid deadline three times, from 28 May to 12 August, to widen participation, the ministry said.

Under the rare earth magnet scheme the incentive is paid per kilogram sold, at the rate each beneficiary quotes, capped at ₹2,150 a kilogram and at 40 per cent of net sales turnover. The capital subsidy is 15 per cent of eligible investment, capped at ₹150 crore for a 1,100 or 1,200-tonne line. Each beneficiary must run the whole chain in-house, from oxide to metal, metal to alloy and alloy to sintered magnet, under the tender terms reproduced in the ministry’s pre-bid responses.

Money follows production. Incentives are released only after the investment milestones are met, the full allocated capacity is commissioned and verified, and a completion certificate is issued. The first milestone is ₹150 crore of eligible investment within a year of the award, and half the capacity must be commissioned within three years. The scheme runs seven years from award, two to build and five to claim.

Source: MHI and Cabinet releases; press reports of the extensions. The extensions added 76 days to the original schedule (TES arithmetic).

MHI’s stated aim was wider participation, and 20 companies and consortia bid for the rare earth magnet scheme. The pre-bid round shows what they pressed for: a longer gestation period, a price escalator for oxide and clarity on imported feedstock. The ministry’s replies mostly referred back to the tender terms.

Will 6,000 tonnes a year meet India’s rare earth magnet demand?

Not on its own. An assessment by IREL, the Defence Metallurgical Research Laboratory (DMRL) and the Bhabha Atomic Research Centre (BARC), tabled in the Lok Sabha in July, puts India’s 2030 requirement at 8,220 tonnes a year, so 6,000 tonnes would cover about 73 per cent (TES arithmetic). Bernstein, as reported in the press, estimates the scheme would meet about 44 per cent of 2035 demand.

The 2030 table is led by mobility and power. Electric vehicles, meaning two, three and four-wheelers, account for 3,250 tonnes and wind turbines for 1,800. brushless DC (BLDC) fans take 980 tonnes, smartphones and computers 600, industrial motors 500 and other consumer electronics 820, with solar pumps and lift motors adding 270. Current demand is about 4,000 tonnes a year, Minister of State Jitendra Singh told the Lok Sabha in March.

The ministry’s table has no defence line. Government statements name defence as an end-use of rare earth magnets, and IREL runs a separate plant for samarium-cobalt magnets, set up exclusively for defence and atomic energy users, according to an MHI reply in July 2025.

How much of the 6,000 tonnes would go to defence-grade applications has not been published. TES tracks that question in its coverage of defence supply chains and industrial strategy. No second round of the rare earth magnet scheme has been announced.

Where will the oxide come from for 6,000 tonnes of magnets?

IREL is the only entity that processes monazite, India’s main rare earth ore, and it makes the NdPr oxide a magnet line needs. MHI told bidders in June that IREL’s NdPr oxide capacity is 400 tonnes a year, enough for about 1,200 tonnes of magnet. The DAE told the Lok Sabha in March that IREL has committed 500 tonnes a year to the selected bidders.

The last row applies the ministry’s own ratio of 400 tonnes of oxide to about 1,200 tonnes of magnet. It is TES arithmetic, not an official requirement figure.

Under the scheme, only the three lowest bidders receive assured, limited IREL supply, according to the ministry. The tender for the rare earth magnet scheme leaves the rest of the oxide procurement to the beneficiaries. MHI’s pre-bid response says each one must make its own arrangements, and the tender states that the government is not responsible for IREL’s supply. The IREL commitment is therefore an offer of feed on separate commercial terms, not a government guarantee.

The resource is large on paper. The Atomic Minerals Directorate for Exploration and Research estimates 7.23 million tonnes of rare earth oxide equivalent in 13.15 million tonnes of monazite, and 1.29 million tonnes in hard rock, according to the DAE. The Indian Bureau of Mines adds that the grade is lean and tied to radioactivity, which makes extraction long, complex and expensive. Monazite is a prescribed substance under the Atomic Energy Act, and processing sits with IREL.

The Union Budget 2026-27 announced rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu to raise NdPr and samarium oxide output. In March the DAE said the modalities were still being worked out and no funds had been sanctioned or spent. The corridors are the stated route to more oxide, so their funding and timeline will set how fast the gap narrows.

Japan’s answer to China’s 2010 curbs paired money with feed. Sojitz and the Japan Organization for Metals and Energy Security (JOGMEC) committed $250 million to Australia’s Lynas in 2011 for long-term supply, and Japan’s reliance on Chinese rare earths fell from about 90 per cent to 60–70 per cent, according to JOGMEC data. India’s scheme pays for the magnet line. The feed rests with IREL’s expansion and the bidders’ own arrangements.

Can the rare earth magnet scheme work without Chinese heavy rare earths?

Only partly. The Indian Bureau of Mines records that dysprosium and terbium, which it lists among the elements used in high-intensity magnets, are not available in Indian deposits in extractable quantity. China’s April 2025 licensing for seven medium and heavy rare earths, including both, has never been suspended. Any magnet line that needs them depends on imports.

A bidder asked MHI in the pre-bid round whether the government had a wider strategy for heavy rare earths, including bilateral arrangements. The ministry replied that the query did not pertain to the tender’s provisions.

China’s wider October 2025 package, which included a licence requirement for foreign-made goods containing as little as 0.1 per cent Chinese-origin rare earths by value, was suspended until 10 November 2026 under Announcement No. 70 of China’s Ministry of Commerce and customs. The ministry confirmed on 28 September that the broader China-US arrangement runs to 10 January 2027, but reports at the start of November said no notice had amended the suspension date. Reuters reported on 9 November that China has since extended the suspension of its new controls until January. TES covered the diplomatic track in its Trump-Xi summit analysis.

India’s own search for supply abroad runs in parallel to the rare earth magnet scheme, and TES has examined one option in its analysis of Myanmar’s rare earths and the India-China contest.

What should readers watch after the rare earth magnet scheme bids?

The reported quotes show bidders willing to take a fraction of the ceiling. They do not show where 2,000 tonnes of oxide will come from, and the ministry has left that to IREL’s expansion and the beneficiaries’ arrangements. If those arrangements are in place before the first lines are commissioned, the rare earth magnet scheme moves India from importing every sintered magnet to making a share of them at home. The first test comes within a year of award, when each beneficiary has to show ₹150 crore of eligible investment.

This article names listed companies as bidders in a government scheme. It is not investment advice or a recommendation on any security.

Sources: Ministry of Heavy Industries and Press Information Bureau releases and tender documents; Department of Atomic Energy reply to the Lok Sabha, 11 March 2026; Indian Bureau of Mines yearbook; Economic Times report of 9 November 2026 on the price quotes; China’s Ministry of Commerce notices as reported. TES arithmetic is marked as such.