₹7,280 crore rare earth magnet scheme: Vedanta, HZL shares rally up to 3.8%; what you need to know

Vedanta shares surged as much as 3.84% to ₹716.95 apiece on the NSE, while HZL rallied 1.57% to ₹534.35 on the NSE.

The scheme aims to promote the manufacturing of sintered rare earth permanent magnets, as announced by the Heavy Industries Ministry, according to the report, which quoted sources.

The government, on March 20, invited bids for setting up manufacturing facilities for 6,000 metric tonnes per annum (MTPA) of magnets under the scheme.

The heavy industries ministry came out with a request for proposal (RFP) for the selection of beneficiaries to establish integrated sintered NdFeB rare earth permanent magnet manufacturing units.

The pre-bid conference will be held on April 7, while the bidding date is May 28. Technical bids will be opened on May 29, 2026.

What are rare-earth magnets?

Rare-earth magnets are the strongest type of permanent magnets, made from alloys of rare-earth elements like neodymium (NdFeB) or samarium-cobalt (SmCo).

They are significantly more powerful, lighter, and smaller than conventional magnets, making them critical for high-performance applications like EV motors, wind turbines, hard drives, and medical devices (MRIs).

Background

In December 2025, the government notified the scheme to promote the manufacturing of sintered rare earth permanent magnets (REPM) with an outlay of ₹7,280 crore.

The initiative is aimed at reducing dependence on China for critical inputs and securing supply chains for EVs, electronics, aerospace, and green energy.

The scheme, approved earlier by the Union Cabinet, aims to build a complete domestic value chain of converting rare earth oxide into sintered NdFeB, essential for India's strategic and industrial advancement.

Neodymium-iron-boron (NdFeB) is the alloy used to create the strongest type of permanent magnets.

"Through this scheme, the Government of India intends to incentivise the setting up of 6,000 MTPA (million tonnes per annum) of integrated REO (rare earth oxides) to sintered NdFeB REPM's manufacturing facilities in the country," the Heavy Industries Ministry said in the notification.

Indigenously produced sintered NdFeB REPMs from NdPr oxide will be eligible for sales-linked incentives and capital subsidy under the scheme.

It will allocate up to 6,000 MTPA of integrated sintered NdFeB magnet manufacturing capacity to five applicants through a transparent bidding process, Global Tender Enquiry (GTE), by issuing a Request for Proposal (RFP).

The minimum allocation to a beneficiary will be 600 MTPA, going up to a maximum allocation of 1,200 MTPA, in multiples of 100 MTPA, as per the notification.

Other details

The beneficiaries will receive sales-linked incentives on the sale of sintered NdFeB REPM and a capital subsidy for setting up the allocated manufacturing capacity.

Further, three selected beneficiaries with the lowest bids would receive an assured limited supply of NdPr oxide from IREL (India) Ltd, a CPSE under the Department of Atomic Energy (DAE).

The total duration of the scheme will be seven years, which includes two years of gestation period for setting up the manufacturing facilities and five years for incentive disbursement on the sale of sintered NdFeB REPM.