Mahindra, Minda Plan Local Magnet Production in India: Sources

• Mahindra and Uno Minda plan to make rare earth magnets locally to reduce dependence on China.
• India may offer incentives for domestic production after China’s export curbs.
• Mining remains a challenge despite India’s large rare earth reserves.

Mahindra & Mahindra and auto parts manufacturer Uno Minda are considering locally made rare earth magnets to reduce reliance on China amid increasing global supply issues. China is responsible for an estimated 90% of the world’s rare earth magnets and in April China imposed export limitations.

While China resumed some shipments to the USA and Europe in July, Indian manufacturers are still trying to obtain approvals. As a result of this disruption, the Indian government is looking at a possible incentive for nearby production and stockpiling of those components because they are essential for EVs (electric vehicles) and electronics.

During a meeting with the Ministry of Heavy Industries in June, Mahindra told the ministry that it would consider a joint venture or long-term supply agreement for magnets made in India.

A senior government official stated, "Some companies have shown interest in investing or setting up rare earth magnet production, including Mahindra. It will take a year or two to have our own production ... But we have to find ways to be independent".

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With two new electric SUVs recently launched, Mahindra has ongoing demand for magnets and believes it is a good investment to produce them locally. Uno Minda, which supplies to PSA Group and Maruti Suzuki, also expressed interest in developing magnets domestically.

By comparison, Maruti has already noted possible production delays due to the interruption of the supply from China. Sona Comstar, which makes components for Ford and Stellantis, was the first India firm to indicate that it wanted to make magnets locally.

Although India has the fifth largest rare earth mineral reserves in the world, mining is still problematic. State-owned IREL, who is currently administering rare earth mining, is going to stop allowing exports and increase domestic supply.

JSW Steel also expressed some interest in mining, but again, will be subject to regulatory approvals. Mahindra and Minda will make their final investment decisions based on government support and raw material availability.