Sona Comstar MD Singh flags magnet quality issues under PLI scheme

Sona Comstar, one of India’s leading auto component makers, has raised questions about the quality of rare earth permanent magnets (REPMs) that will be produced under the Ministry of Heavy Industries’ (MHI) proposed production-linked incentive (PLI) scheme.

  The company’s Managing Director Vivek Vikram Singh, in a meeting held a few weeks ago with various stakeholders such as the MHI and the Department of Atomic Energy (DAE), requested the government to develop the testing infrastructure needed to ensure the quality of REPMs manufactured in the country under the proposed scheme.

 

“During the meeting, Singh raised concerns about the quality of magnets that will be produced in India under the scheme,” a source familiar with the matter said.

 

Sona Comstar, the MHI and DAE did not respond to queries sent by Business Standard regarding this matter till the time of going to the press.

 

Singh’s remarks came after an executive from Indian Rare Earths Limited (IREL), during the meeting, pointed out that the grade and quality of rare earth elements available in India are lower than those in countries such as China. As a result, three additional refining steps are required when converting these elements into rare earth oxides, which increases production costs, the IREL executive said, according to another source.

 

IREL, which operates under the DAE, is the only entity in India that mines rare earth elements and refines them into rare earth oxides, the key raw material used to make REPMs.

 

The MHI’s proposed PLI scheme focuses entirely on providing financial incentives -- both capital subsidy and sales-based support - to winning bidders that set up manufacturing facilities capable of producing a total of 6,000 ton of REPMs per year.

 

To produce 6,000 ton of REPMs annually, the winning bidders will need 1,500 ton of rare earth oxides. IREL has informed the MHI that it can supply no more than 500 ton, meaning the remaining 1,000 ton will have to be sourced from abroad.

 

A government official told the newspaper that questions regarding the quality of REPMs are being raised because the rare earth elements available in India are of lower grade, and it remains unclear what quality of the remaining 1,000 ton will be sourced from overseas. Therefore, the bidders want a standardised testing procedure to ensure a recognised quality benchmark so that when they sell REPMs to other entities, no doubts arise about quality, the official added.

 

During the meeting, Sona Comstar’s MD also urged the MHI and the DAE to establish a robust testing infrastructure in India to ensure that REPMs produced under the proposed scheme match the quality of those manufactured anywhere else in the world.

 

Since April this year, China has restricted the export of REPMs to India, affecting production in the Indian automobile industry. REPMs are used in various auto components, especially in traction motors for electric vehicles.

 

Almost 90 per cent of global REPM production takes place in China. The country also leads in the production of rare earth elements and in the technology required to convert rare earth oxides into REPMs.