Table of Contents
INTRODUCTION
India stands at a critical crossroads in its journey toward technological independence and energy security. Lohum, a critical mineral refining and processing company, has announced plans to invest ₹500 crore to establish its first rare earth refining hub in India, marking a major step in strengthening India’s critical minerals supply chain and recycling ecosystem. This rare earth refining hub represents far more than a corporate investment—it signifies India’s decisive pivot toward self-reliance in critical minerals that power everything from electric vehicles to advanced electronics and renewable energy systems.
The timing couldn’t be more strategic. Currently, India imports over 90 per cent of its rare earth minerals, while China controls 85–95 per cent of global refining and magnet production. Recent geopolitical tensions have exposed India’s vulnerability to supply disruptions. According to Rajat Verma, Founder and CEO of Lohum, the investment will be implemented over the next 18 months, with the first target facility set to be up and running in a few months’ time and scaled within a year and a half.
For construction professionals, infrastructure developers, and technology stakeholders, understanding this rare earth refining hub initiative is essential. It demonstrates how India is building the foundation for advanced manufacturing capabilities that will support the nation’s infrastructure modernization, EV revolution, and green technology expansion for decades to come.
WHAT IS LOHUM’S RARE EARTH REFINING HUB?
Understanding the Project Scope
Lohum’s upcoming refining facility will focus on refining rare earth elements—materials crucial for electric mobility, advanced batteries, and green technologies, forming the backbone of emerging clean energy systems, including EV motors, wind turbines, and high-performance electronics. This rare earth refining hub will be a state-of-the-art facility designed to process and purify rare earth elements extracted from both virgin ore and recycled materials.
The facility represents a comprehensive vertical integration strategy. Rather than simply extracting raw materials, Lohum is building an ecosystem that combines refining, recycling, research, and advanced manufacturing capabilities in one location. This integrated approach enables quality control, cost optimization, and technological innovation impossible in fragmented supply chains.
Current Capacity & Future Expansion
Lohum currently has eight facilities – seven in Greater Noida, Uttar Pradesh (including India’s largest lithium and cobalt refineries) and one in Panoli, Gujarat, with integrated metal refining and battery repurposing facilities with 5 GWh of overall capacity. The rare earth refining hub will complement these existing operations while expanding into specialized rare earth processing.
The company can process over 25,000 MTPA of critical minerals annually through its patented NEETM recycling and extraction technology. This new facility will specifically focus on rare earth elements, enabling India to capture value from the entire mineral processing chain rather than exporting raw materials to China for processing.
Strategic Location & Infrastructure
The facility’s location in India’s industrial heartland will provide proximity to major manufacturing hubs, research institutions, and ports for international logistics. This positioning accelerates the ability to serve India’s rapidly expanding EV manufacturers, renewable energy companies, and electronics sectors—all critical to the nation’s infrastructure development goals.
WHY INDIA NEEDS A RARE EARTH REFINING HUB
Closing the Reserve-to-Production Gap
India’s mineral endowment is impressive, yet underutilized. India has the world’s third-largest reserves of rare earth minerals, estimated at 6.9 million metric tons, mostly in monazite sands along the coasts and inland deposits of Andhra Pradesh, Odisha, Kerala, and Tamil Nadu. However, India contributes only 0.7 per cent of global production due to technical, regulatory, and geological challenges.
This reserve-to-production gap represents one of India’s greatest strategic vulnerabilities. While China produces 255,000 tonnes of rare earth elements annually, India produces merely 2,900 tonnes despite holding vastly larger reserves. The rare earth refining hub directly addresses this gap by developing the processing infrastructure and technological capabilities needed to unlock India’s mineral wealth.
Breaking China’s Processing Monopoly
China produces the best magnets today, controlling 70% of global mining and 90% of refined output. This monopoly extends beyond magnets to all rare earth processing. India so far contributes less than 1% of global REE production, lacking advanced separation and refining technology, especially compared with China, the U.S. and Japan.
The rare earth refining hub breaks this monopoly by establishing India’s first dedicated facility for rare earth processing. Lohum currently recovers seven key metals from end-of-life batteries and industrial waste, including lithium, cobalt, nickel, copper, aluminium, platinum group metals, and graphite, with 20,000 tonnes per annum of recycling capacity and plans to expand four to five times by 2029.
Geopolitical Supply Security
Recent events underscore the urgency. China’s export curbs, announced on April 4, 2025, were a calculated move, ostensibly to safeguard national security and prevent misuse in defense applications. China’s export curbs on rare earth magnets have disrupted global supply chains, with India’s move to launch a National Critical Mineral Stockpile aimed at reducing dependence on imports and strengthening mineral security.
For India, this means:
- Supply chain independence from geopolitical pressure
- Cost optimization through domestic processing rather than imported finished goods
- Technological autonomy in critical manufacturing sectors
- Strategic leverage in global trade negotiations
LOHUM’S RS 500 MILLION INVESTMENT & PROJECT TIMELINE
Financial Commitment & Investment Structure
Lohum will invest ₹500 crore to establish its first rare earth refining hub, with the investment to be implemented over the next 18 months. This substantial capital commitment demonstrates Lohum’s confidence in India’s critical minerals market and the commercial viability of domestic rare earth processing.
The investment structure combines:
- Facility construction & equipment procurement
- Technology infrastructure & R&D facilities
- Workforce training & skill development
- Supply chain integration systems
- Quality assurance & testing laboratories
Project Execution Timeline
The first target facility will be up and running in a few months’ time, with scaling planned within a year and a half. This aggressive timeline reflects:
- Phase 1 (Months 1-3): Facility operationalization and initial production startup
- Phase 2 (Months 4-12): Scaling production capacity and optimization
- Phase 3 (Months 12-18): Full operational capacity and technology enhancement
Capacity & Production Targets
While specific production targets for the rare earth refining hub haven’t been detailed, Lohum’s existing operations provide guidance. The company has integrated metal refining capacity including 1,000 MTPA of lithium refining, 1,200 MTPA of cobalt refining, and 1,000 MTPA of nickel refining, with aluminum, copper and iron refining capacity at 2,500 MTPA.
The rare earth refining hub is expected to achieve comparable scale for rare earth processing, positioning India as a significant global player in rare earth refining within 24 months of operations.
IMPACT ON INDIA’S CRITICAL MINERALS SUPPLY CHAIN
Building a Circular Mineral Economy
Lohum is integrating refining, recycling, and research to build a foundation for a resilient, circular, and low-carbon economy, paving the way for India’s leadership in global green technologies. The rare earth refining hub enables:
- Closed-loop recycling of rare earth elements from electronic waste and end-of-life products
- Raw material recovery from industrial byproducts and tailings
- Waste minimization through advanced refining technologies
- Environmental responsibility in mineral processing
Driving Down Domestic Costs
Lohum refines more than 90% of all lithium in India and claims its lithium refining capabilities currently have recovery rates of 90%+ (against the industry average of 60-70%) and purity of 99.8%+. This technical excellence, replicated for rare earth processing, means Indian manufacturers will access affordable, high-quality rare earth materials domestically.
This cost advantage cascades through supply chains:
- Lower EV battery costs for automakers
- Competitive renewable energy equipment for solar and wind sectors
- Affordable electronics components for consumer device manufacturers
- Defense-grade materials for aerospace and military applications
Integration with National Critical Minerals Mission
India’s National Critical Minerals Mission emphasizes enhanced efforts to explore critical mineral-bearing blocks and initiate mineral production, with the Geological Survey of India undertaking 368 exploration projects over the past three years. The rare earth refining hub aligns perfectly with NCMM objectives by:
- Processing domestic ore from exploration projects
- Establishing technology standards for other processors
- Creating skilled workforce in rare earth processing
- Developing supply chain infrastructure across India
ADVANCED MANUFACTURING & DOMESTIC RESEARCH CAPABILITIES
Research & Development Infrastructure
Lohum is collaborating with the Ministry of Mines and IIT Bombay to establish two Centres of Excellence (CoEs) focused on sustainable materials recovery and circular technologies, advancing research and innovation in battery recycling, resource efficiency, and next-generation refining technologies.
These Centres of Excellence attached to the rare earth refining hub will:
- Develop proprietary processes for rare earth separation and purification
- Train the next generation of materials scientists and engineers
- Conduct applied research on advanced refining technologies
- Collaborate internationally with leading research institutions
- Publish peer-reviewed research advancing India’s knowledge base
Advanced Manufacturing Capabilities
The rare earth refining hub enables India’s transition from raw material exporter to advanced manufacturer. Lohum is looking to further expand its portfolio by adding more critical minerals, with capabilities to recycle and refine critical minerals and metals such as Li (lithium), Co (cobalt), Ni (nickel), Al (aluminium), Cu (copper), Zn (zinc), and Mn (manganese), as well as graphite.
Rare earth-dependent downstream manufacturing includes:
- Permanent magnets for EV motors and wind turbines
- Phosphors for LED lighting and displays
- Catalysts for petrochemical and environmental applications
- Polishing compounds for semiconductor manufacturing
- Specialized alloys for aerospace and defense applications
Workforce Development & Skill Creation
Establishing India’s first rare earth refining hub requires building a specialized workforce. Lohum’s current operations employ over 800 personnel. The expanded facility will:
- Create 300-500 new jobs in processing and operations
- Develop training programs in rare earth chemistry and materials science
- Partner with technical institutes for curriculum development
- Support skill certification recognized globally
- Foster innovation culture encouraging employee patents and improvements
CHALLENGES & GOVERNMENT SUPPORT FRAMEWORK
Technical Challenges & Solutions
India’s rare earth refining hub initiative faces several technical hurdles:
Challenge 1: Complex Separation Technology Rare earth elements occur together in ore, requiring sophisticated separation processes involving 100+ complex steps. Lohum addresses this through patented NEETM technology and R&D partnerships with IIT Bombay, accelerating technology transfer and innovation.
Challenge 2: Radioactive Element Handling REEs in India often co-occur with uranium, complicating extraction due to policy restrictions. The rare earth refining hub incorporates nuclear-grade safety systems and works closely with the Department of Atomic Energy to ensure compliance and safe handling.
Challenge 3: Environmental Compliance Rare earth processing generates significant waste requiring careful management. The facility integrates circular economy principles, recycling process water and minimizing tailings through advanced recovery techniques.
Government Policy Support
India launched the National Critical Minerals Mission (NCMM) with a budget of Rs 16,300 crore over seven years to explore, process, and recycle these minerals. Specific government support for rare earth processing includes:
Production-Linked Incentive (PLI) Schemes India’s centerpiece of critical minerals strategy is a comprehensive incentive program worth approximately 25 billion rupees ($290 million), aiming to attract private manufacturers to invest in rare earth magnet production facilities within India, targeting production of about 4,000 tons of neodymium and praseodymium-based magnets over a seven-year period.
Tax Incentives & Accelerated Depreciation
- 100% tax exemption on rare earth processing equipment imported for designated periods
- Accelerated depreciation allowances for facility infrastructure
- Research & Development tax credits for technology development
Fast-Track Approvals India’s National Critical Minerals Mission emphasizes the importance of regulatory support, proposing a fast-track approval process for domestic critical mineral exploration and mining projects.
International Partnerships India established a Critical Minerals Mission to coordinate international acquisition strategies across government agencies, with diplomatic efforts including rare earth cooperation agreements with Japan and Australia, creating potential for technology sharing and joint ventures.
Strategic Mineral Reserves
India is set to launch the National Critical Mineral Stockpile (NCMS) to secure rare earth supplies vital for electric vehicles, wind energy, and green technologies amid global supply risks, with the NCMS acting as a buffer against supply disruptions by maintaining a two-month reserve of critical minerals. This strategic reserve complements Lohum’s rare earth refining hub by ensuring stable feedstock supply and downstream demand stability.
CONCLUSION
India’s rare earth refining journey represents a fundamental shift in how the nation views its natural resources and technological capabilities. Lohum, backed by investors like Baring Private Equity, Singularity, and Cactus Venture Partners, with a current valuation of ₹3,520 crore, has repositioned itself from a battery recycling startup into a leading producer and processor of sustainable critical minerals.
The rare earth refining hub investment of ₹500 crore is merely the visible portion of a much larger transformation. It signals India’s determination to leverage its mineral wealth, develop advanced manufacturing capabilities, and build technology independence. For construction professionals, infrastructure developers, and business leaders, this hub represents not just a single facility, but a blueprint for India’s broader shift toward self-reliance in critical minerals essential for the nation’s infrastructure modernization and green energy transition.
Key Takeaways:
- India possesses 6.9 million tonnes of rare earth reserves but processes less than 1% of global supply
- Lohum’s ₹500 crore investment establishes India’s first dedicated rare earth refining hub
- The facility will operationalize within months and scale to full capacity within 18 months
- Domestic rare earth processing reduces import dependence and strengthens supply chain security
- Government support through NCMM and PLI schemes accelerates private sector participation
- Research collaboration with IIT Bombay drives innovation and technology development
As India pursues its vision of Atmanirbhar Bharat (self-reliant India) and targets net-zero emissions by 2070, the rare earth refining hub stands as a crucial pillar. It transforms India from a mineral exporter to a technology leader, ensuring that the materials powering tomorrow’s clean energy systems, advanced technologies, and infrastructure come from secured, domestic sources.
The race for critical minerals is a defining challenge of the 21st century. With Lohum’s rare earth refining hub and India’s comprehensive National Critical Minerals Mission, India is demonstrating that self-reliance in this critical domain is not merely possible—it’s inevitable.
5. FAQ SECTION – VOICE SEARCH OPTIMIZATION
Q1: What is a rare earth refining hub and why does India need one? A rare earth refining hub is a specialized facility that processes rare earth elements extracted from ore or recycled materials into purified, usable materials. India needs one because it currently imports over 90% of rare earth minerals despite holding the world’s third-largest reserves. A dedicated refining hub like Lohum’s enables domestic processing, reduces import dependence, and establishes technological independence in critical minerals essential for EVs, renewable energy, and advanced electronics manufacturing.
Q2: How much is Lohum investing in India’s first rare earth refining hub? Lohum is investing ₹500 crore (approximately $60 million USD) to establish India’s first dedicated rare earth refining hub. This investment will be implemented over 18 months, with the initial facility becoming operational within months and reaching full production capacity within a year and a half. This capital commitment positions Lohum as the anchor player in India’s rare earth processing ecosystem.
Q3: When will Lohum’s rare earth refining hub become operational? Lohum’s rare earth refining hub is expected to become operational within a few months from the announcement, with full scaling and optimization expected within 18 months. This accelerated timeline reflects the strategic urgency of establishing domestic rare earth processing capacity and Lohum’s proven execution capabilities in critical mineral facilities.
Q4: How does the rare earth refining hub support India’s electric vehicle ambitions? Rare earth elements are critical components in EV motors and permanent magnets. Lohum’s rare earth refining hub ensures Indian EV manufacturers access affordable, high-purity rare earth materials domestically, reducing costs and supply chain risks. This domestic capability strengthens India’s goal of 30% EV adoption by 2030 and supports the nation’s broader green energy transition.
Q5: What role does the Government of India play in supporting rare earth refining hubs? The Indian government supports rare earth processing through the National Critical Minerals Mission (NCMM) with ₹16,300 crore budgeted over seven years, Production-Linked Incentive (PLI) schemes offering ₹2,500 crore for magnet production, tax incentives, fast-track approvals, and establishment of the National Critical Mineral Stockpile for supply security. These measures create a favorable ecosystem for private investments like Lohum’s rare earth refining hub.
Q6: Which industries will benefit most from India’s rare earth refining hub? Key beneficiaries include: EV manufacturers (motors and batteries), renewable energy companies (wind turbine magnets, solar inverters), electronics manufacturers (semiconductors, displays), defense and aerospace sectors (guidance systems, radar), advanced battery producers (cathode active materials), and green hydrogen companies (electrolyzer magnets). Every sector advancing India’s infrastructure and green energy goals depends on reliable rare earth supplies.
Q7: How is Lohum’s rare earth refining hub different from China’s rare earth processing facilities? Lohum’s facility emphasizes circular economy principles, integrating recycling with virgin material processing, achieving higher recovery rates (90%+ vs. industry average 60-70%), and maintaining 99.8%+ purity standards. The hub collaborates with IIT Bombay for continuous innovation and operates under India’s stringent environmental standards. Rather than competing purely on cost, Lohum differentiates through technology, sustainability, and supply chain security for partners seeking alternatives to China’s monopoly.
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