Indian automaker Mahindra & Mahindra, parts maker Uno Minda keen to produce rare earth magnets, sources say

Indian automaker Mahindra & Mahindra, parts maker Uno Minda keen to produce rare earth magnets, sources say

Indian automakers Mahindra & Mahindra and parts maker Uno Minda have expressed interest in producing rare earth magnets, according to sources familiar with the matter. The move comes amidst growing global demand for these critical components, which are essential for electric vehicle (EV) motors and other high-tech applications. The companies are reportedly exploring opportunities to establish domestic manufacturing capabilities for rare earth magnets, aiming to reduce reliance on foreign suppliers and secure the supply chain for their respective businesses.

The interest from these automakers aligns with India's broader strategy to boost its rare earth production and reduce dependence on China, which currently controls approximately 90% of global rare earth processing capacity. In 2024, China implemented stricter controls on certain rare earth materials, citing national security concerns, which has disrupted global supply chains [2].

India's government has recognized the strategic importance of developing domestic rare earth capabilities and has launched a comprehensive incentive program worth approximately 25 billion rupees ($290 million) to attract private manufacturers to invest in rare earth magnet production facilities within the country. The program aims to produce about 4,000 tons of neodymium and praseodymium-based magnets over a seven-year period [2].

Major Indian conglomerates, including Vedanta Group and JSW Group, have already expressed interest in participating in the bidding process for the incentive program. These companies bring different strengths and motivations to the rare earth sector, with Vedanta and JSW possessing significant mining and industrial expertise, and Sona BLW representing the downstream manufacturing perspective with direct links to end-use applications in electric vehicles [2].

The interest from Mahindra & Mahindra and Uno Minda reflects a strategic calculation to secure critical inputs and position themselves in a market expected to grow significantly as India's EV and renewable energy sectors expand. By developing expertise in rare earth processing, these companies could establish dominant positions and gain long-term competitive advantages.

However, the development of a competitive rare earth industry in India faces substantial challenges. Overcoming economic, technical, and environmental hurdles will be crucial for the success of these initiatives. The Indian government's incentive program aims to provide financial support during the critical early stages to attract private investment and overcome these barriers [2].

References:
[1] https://www.marketwatch.com/story/neo-performance-materials-shares-rise-on-50m-rare-earth-magnets-supply-contract-38c95653
[2] https://discoveryalert.com.au/news/india-rare-earth-output-boost-2025/