Vedanta group company Runaya - a zero waste, zero discharge aluminium processing entity - will invest nearly ₹1,000-₹1,200 crore, with 25-33 per cent of this, or ₹300-₹500 crore, being set aside for setting up rare earth element (REE) processing and magnet-making facilities.
The remaing capex will be used towards capacity doubling of existing recycling facilities to 200,000 tonnes per annum (from 100,000 tonnes per annum) over a two-year period.
According to Jagannath Prasad, CEO, Green Aluminium Recovery & Diversified Metal Recovery Business, Runaya, the company is “seriously evaluating” the REE project. It could look at a joint venture with an international partner, a tech transfer or a partnership, to take the project forward. Details are being worked out, and discussions are underway with international players.
“Typically, investment details for the REE project are in the ₹300-500 crore range - which could include processing and magnet making. The details are being discussed and we are also in talks with some international players for tech access, “ he told businessline.
Runanya’s decision to tap into the segment comes at a critical juncture, where India is itself struggling for self-reliance in REE magnet-making.
The metal recycling start-up, established in 2017, was co-founded by Annanya and Naivedya Agarwal, sons of Navin Agarwal, the Vice-Chairman of Vedanta Ltd.
- Also read: Govt to decide subsidy scheme for rare earth magnet production in 15-20 days: Kumaraswamy
India’s REE Magnet Crises
REE magnets are a critical component in EV-making, wind mills, defence, and in some other sectors. India’s auto sector has been badly hit, with China - the largest supplier - imposing export restrictions on these magnets beginning April, which has led to a supply shortage. Stocks are limited, and India is scrambling for supply chain arrangements.
Indian imports are around 3,600 tonnes, with nearly 870 tonnes coming from auto-makers. REE mining in India is around 2,900 tonnes, primarily by IREL (India Rare Earth Ltd) - a Department of Atomic Energy PSU - and a part of this production is sold to Japanese auto-major Toyota.
Ironically, the country has the third largest REE reserves in the world, of 690,000 tonnes, but lacks mining tech and processing capabilities. It is trying to ramp up mining, production and processing of this critical mineral.
In fact, several conglomerates have already reached out to different ministries expressing their willingness to invest in processing tech, if backed by an incentive scheme.
The country’s Mines Ministry is planning a ₹1,500-crore incentive-based scheme, pushing for the setting up of critical mineral processing facilities. It will be backed by capex support, finance cost relaxation, taxation benefits, etc.
Project timelines
Runaya’s parent entity, Vedanta, and its subsidiaries are among the enrities that have won REE and critical mineral blocks in India.
“We are mostly into processing for the value-added segment, as against Vedanta, which is mostly pure-play mining,“ Prasad said.
The mineral recycler is expected to finalise its REE processing plan and partnership by “either FY26-end or early FY27”.
Capex Plans
According to Prasad, the other ₹700-750 crore will be funded mostly via internal accruals. “We do have healthy margins in the business... And there will be some external borrowings, too, for the capex,“ he said.
As capacities double, the company is also looking for new tie-ups to secure “raw material supplies”. Talks are on with global trading houses.
Expansion could add around ₹700-750 crore to the topline, which is around ₹1,000 crore.
The long-term plan, he says, is to increase capacities to 1 million tonnes per annum over a 5-year-period.