L&T and Coal India Lead 20-Firm Race That Cracks China’s Magnet Hold

Twenty firms including Larsen & Toubro and Coal India submitted bids for the Centre’s ₹7,280-crore scheme to build 6,000 MTPA of integrated sintered NdFeB rare earth permanent magnet capacity, the Ministry of Heavy Industries said after technical bids opened on the 13 August. Global specialists NEO Performance Materials and Proterial (India) joined domestic names such as ReNew, Attero Recycling and Lohum Magnets.

The rush is the clearest sign yet that India’s push to break Chinese control of the magnets inside EVs, wind turbines and defence systems has drawn real industrial capital, not just policy papers.

The bidder field spans conglomerates, public sector miners, clean energy developers, recyclers and overseas magnet houses. That spread matters because the scheme asks winners to master oxide conversion, alloying and sintering in one integrated chain, not a single process step. Capital alone will not close the gap. Process depth will.

How the Scheme Splits Capacity and Cash

The Union Cabinet cleared the programme on 26 November 2025. It targets India’s first full chain from NdPr oxide through metal and alloy to finished sintered magnets. Five winners will share the total, each eligible for up to 1,200 MTPA.

The RFP went live on the Central Public Procurement portal on 20 March 2026. Addendums pushed the final submission deadline to 12 August. The three lowest bidders also receive a limited assured supply of NdPr oxide from IREL (India) Ltd, the state rare-earth producer.

India’s REPM demand is projected to double by 2030 from 2025 levels. Nearly all of it now arrives as finished magnets or components from abroad.

The cash split itself is the policy signal. Capital subsidy is the smaller slice. Sales incentive is the larger one. Winners therefore recover most support only after magnets leave the factory gate and reach paying customers. That structure rewards throughput and quality more than steel and concrete.

Five awards of up to 1,200 MTPA each also keep any single plant from dominating the early market. Indian OEMs gain a shortlist of domestic sources rather than one national champion. Competition among the five can keep prices honest once the incentive window closes.

The 2025 Shock That Made Magnets a Security Issue

China tightened export controls on seven heavy rare earths and related magnets in April 2025. Shipments to India stalled for months. EV makers and auto-component plants reported empty inventories and slowed lines. A second, broader set of controls arrived in October before a temporary suspension.

Those curbs turned a quiet import line into a boardroom risk. Wind OEMs, electronics assemblers and defence contractors discovered the same vulnerability at the same moment.

• China’s magnet grip: 94% of global sintered permanent magnet output in 2024
• Refining share: 91% of magnet rare-earth refining
• India exposure: near-total dependence on imported NdFeB for traction motors and generators
• Downstream stake: EVs, offshore wind, aerospace actuators and precision defence systems

The IEA notes that China’s share expanded significantly to reach 94% in 2024 from roughly half two decades earlier. Diversified magnet capacity outside China still covers well under 20% of projected non-China demand by 2035 even after announced projects.

The April stall and the October widening showed how fast a midstream choke can travel into assembly lines. Empty magnet inventories do not stay a purchasing problem. They become a production problem, then a delivery problem, then a revenue problem. That sequence is why the Cabinet treated sintered NdFeB as industrial infrastructure rather than a niche materials bet.

India’s near-total import dependence left little buffer when licences slowed. Firms that had treated Chinese magnets as a routine input discovered they had no ready substitute at volume. The scheme is a direct response to that discovery.

An Unusual Coalition of Bidders

The 20 names mix three distinct groups. Engineering and infra heavyweights sit beside miners and recyclers. Foreign magnet specialists complete the field.

• Conglomerates and builders: Larsen & Toubro, Shankaranarayana Constructions, Keystone Infra-Huebox JV
• PSUs and energy: Coal India, ReNew, Prozeal Green Energy, Midwest Energy JV
• Magnet and materials specialists: NEO Performance Materials (Singapore), Proterial (India), Lohum Magnets & Energy Solutions, Attero Recycling, N.A.N. Magnetech, PrNd Metal and Magnets, 20 Microns, others

L&T’s presence follows L&T’s recent green pivot into renewables and advanced manufacturing. Coal India brings mining scale and a balance sheet large enough for capital-heavy plants, even as Coal India’s latest earnings snapshot showed mixed mid-cap pressure. Recyclers such as Attero and Lohum already handle end-of-life magnets and batteries; their entry shortens the loop from scrap to new oxide.

NEO and Proterial bring process know-how that pure domestic bidders still lack. Industry chatter on X notes L&T will almost certainly need a technology partner for sintering and coating precision. The crowd view is that the scheme succeeds only if those partnerships stick beyond the subsidy window.

The coalition is unusual because the three groups solve different parts of the same problem. Builders and PSUs can raise capital and deliver large plants. Recyclers already touch magnet scrap and battery streams. Foreign specialists hold sintering and coating recipes that India has not yet industrialised at scale. A winning bid that joins at least two of those strengths stands a better chance of clearing the two-year gestation hurdles.

Pre-bid interest had already pointed in this direction. The conversion from conference attendance to sealed bids shows the tender cleared a basic commercial screen for firms that rarely share a shortlist.

What the Money Buys

Capital support covers oxide-to-metal, metal-to-alloy and alloy-to-magnet lines. The larger pot is the sales-linked payout. Beneficiaries receive incentives only after they sell finished REPMs. That design ties cash to output, not just plant photographs.

The Cabinet note lists sales-linked incentives of Rs. 6450 crore across five years. Gestation lasts two years from award. Full commercial run therefore sits in the 2028-29 window if awards land this year.

IREL’s existing NdPr oxide capacity sits near 400 MTPA, enough in theory to feed roughly one full 1,200 MTPA magnet line once converted. Assured volumes for the three cheapest bids reduce feedstock risk for the early movers. Later winners will need commercial offtake contracts or imports of oxide until IREL expands.

The incentive math pushes winners to chase customers early. A plant that runs below capacity still carries fixed costs, yet collects less sales support. That pressure should discourage trophy projects that look complete on paper but idle after commissioning.

Integration across those stages is the point of the scheme. Separating them would leave India dependent on imported alloy or block even if final magnet pressing moved onshore. The outlay is built to pull the whole chain inside the country.

EV Makers, Wind Farms and Defence Lines Stand to Gain

Sintered NdFeB magnets deliver the highest energy density of any commercial permanent magnet. Traction motors in electric two-wheelers and cars use them for range and torque. Direct-drive wind turbines rely on them to cut gearbox weight. Missile actuators, radar gimbals and aircraft generators need the same temperature-stable grades.

Domestic capacity of 6,000 MTPA will not replace every import overnight. It will, however, give Indian OEMs a second source and a negotiating lever. Auto component suppliers that currently wait for Chinese licences can dual-source. Defence procurement can start specifying Indian-origin magnets without immediate volume shortfalls.

Employment and skill effects sit further downstream. Oxide conversion and sintering plants need metallurgists, vacuum-furnace technicians and quality labs. Those roles do not exist at scale in India today.

The demand path sharpens the stakes. If REPM use doubles by 2030 from 2025 levels, every tonne of reliable domestic output frees import licences for grades or volumes the new plants cannot yet cover. OEMs gain scheduling certainty. That certainty is often worth as much as a modest price gap.

• EV traction motors gain a local magnet option for range and torque builds
• Direct-drive wind turbines gain supply cover for gearbox-light designs
• Defence and aerospace buyers gain a path to Indian-origin specification
• Component suppliers gain dual-source leverage when export licences tighten

Skill formation will lag the first pour of metal. Vacuum furnaces, coating lines and magnet testing bays need trained crews before nameplate output is real. The seven-year scheme window gives room to build those crews if winners invest early rather than chase only the sales payout.

China Still Owns the Global Midstream

The PM India release frames the scheme as creating 6,000 Metric Tons per Annum of integrated capacity and positioning India as a global player. Relative to Chinese output the number remains modest. China produced the bulk of the world’s estimated 200,000-plus tonnes of NdFeB magnets in recent years.

Yet every tonne of non-Chinese magnet capacity carries insurance value. The IEA calculates that full Chinese export controls could put trillions in downstream production at risk outside China, with automotive the single largest exposure. India’s scheme is one of several parallel efforts in the United States, Europe, Japan and Australia. None of them alone breaks the concentration. Together they raise the cost of weaponising supply.

Pre-bid interest already showed breadth: 25 firms, including JSW, Vedanta and NLC India, attended the April conference. Twenty actual bids is a solid conversion rate for a first-of-kind tender that demands both capital and specialised process technology.

Scale context keeps expectations honest. Six thousand MTPA is a foothold beside a Chinese industry measured in the hundreds of thousands of tonnes. The strategic return is optionality. A second source changes negotiation dynamics even when it does not match total volume.

Global peers are running the same race. Parallel projects in other markets mean India is not trying to outproduce China alone. It is trying to make export controls less decisive for its own EV, wind and defence build-out. That is a narrower goal, and a more achievable one.

How the Bid Calendar Lined Up

The path from Cabinet approval to open technical bids was short by public-procurement standards, yet dense with process steps. Each date narrowed the field from policy intent to firms willing to post a full technical package.

1. April 2025: China tightens export controls on seven heavy rare earths and related magnets; Indian shipments stall.
2. October 2025: A broader set of Chinese controls arrives, then meets a temporary suspension.
3. 26 November 2025: The Union Cabinet clears the ₹7,280-crore REPM scheme.
4. 20 March 2026: The RFP goes live on the Central Public Procurement portal.
5. April 2026: Twenty-five firms attend the pre-bid conference, including JSW, Vedanta and NLC India.
6. 12 August 2026: Final submission deadline after addendums.
7. 13 August 2026: Technical bids open; twenty firms remain in the field.

The April 2025 shock and the November Cabinet decision sit only months apart. That pace shows how quickly empty inventories moved magnets from a materials footnote to a security file. The later RFP and addendum cycle then tested whether industrial capital would follow the policy paper. Twenty bids answered that test in the affirmative.

Commercial run still lies ahead. Gestation runs two years from award. The 2028-29 window is the first realistic point at which finished magnets can reach Indian buyers under the sales incentive. Everything between award and that window is land, power, clearances and technology lock-in.

Why Assured Oxide Changes Early Economics

Feedstock is the quiet constraint inside an integrated magnet plant. Sintering know-how and furnace capacity mean little if NdPr oxide arrives late, short, or at a price that erases margin. The scheme’s limited assured supply from IREL for the three lowest bidders attacks that risk directly.

IREL’s existing NdPr oxide capacity near 400 MTPA can, in theory, support roughly one full 1,200 MTPA magnet line once converted. That arithmetic explains why assured volumes are rationed rather than universal. Early movers on price gain a state-backed oxide bridge. Later winners must secure commercial offtake or import oxide until IREL expands.

Recyclers in the bidder list add a second feedstock path. Firms that already handle end-of-life magnets and batteries can route scrap-derived material into the same oxide and metal steps. That loop will not replace primary supply at 6,000 MTPA, yet it can smooth shortfalls and cut import exposure for specific grades.

Foreign process partners matter here as much as at the sintering press. Oxide-to-metal yields, alloy consistency and coating durability decide whether a plant hits the quality bars EV and defence buyers set. Assured oxide gets material to the gate. Partnerships decide whether that material becomes a magnet customers will accept when the sales incentive begins to taper.

Selection Will Decide Whether the Chain Sticks

Financial bids and evaluation come next. The Least Cost System scores technical competence first, then price. Winners must lock in land, power, environmental clearances and technology licences inside the two-year window. Failure on any of those points risks the entire incentive stream.

The decisive test is not the award ceremony. It is whether the five plants reach nameplate output and find willing Indian buyers at competitive prices once the sales incentive tapers. If they do, the next capacity round becomes easier to finance. If they stall, India will still import the majority of its magnets in 2032.

For now the bidder list itself is the signal. Coal miners, construction majors, battery recyclers and Japanese-Canadian magnet houses all decided the same tender was worth the engineering and compliance cost. That collective bet is what begins to pry open a supply chain that had been closed for two decades.

Technical scores will sort process depth from balance-sheet size. Price scores will then rank the firms that clear that bar. The three lowest bidders gain the extra cushion of assured IREL oxide, which can compound a cost edge through the gestation years. Evaluation order therefore shapes more than the award list. It shapes who holds feedstock security when construction risk is highest.

After awards, the public test shifts to commissioning milestones and first commercial invoices. Nameplate capacity on a slide does not move an EV line. Delivered magnets at a workable price do. That is the measure against which the 2028-29 window will be judged, and the measure that will decide whether a second capacity round finds capital waiting.