Midwest Advanced Materials bets ₹1,000 crore on rare earth magnets

Plans first production by Dec; secures Sri Lankan mines

India’s solution to the ongoing crisis surrounding rare earth magnets may well be on track, as Hyderabad-based Midwest Advanced Materials (MAM) is all set to produce the country’s first rare earth magnets by December from its 500-tonne-per-annum facility in Hyderabad, a top company executive told Business Standard on Sunday. 

The Kollareddy family-owned company is also considering investing ₹1,000 crore over a period of three years to expand its capacity to around 5,000 tonnes per annum, in addition to backward integration. Midwest Ltd (a sister concern of MAM) has secured mines containing monazite (feedstock for rare earths) strategically in Sri Lanka to ensure its long-term road map, said Midwest Chief Executive Officer Ramachandra Kollareddy.

  Midwest, which owns these mines, is gearing up for a ₹650 crore initial public offering (IPO) soon. 

MAM has also secured technology to extract and process rare earth magnets from the Non-Ferrous Materials Technology Development Centre in Hyderabad.

 

“By December, we will be supplying the first products, and the industry may take a few months to test these customised products. The idea is to scale up capacities once we stabilise the product and streamline the production,” said Kollareddy.

In April, China’s Ministry of Commerce imposed export restrictions on several rare earth elements and magnets as a response to US President Donald Trump’s tariff increase on Beijing’s products.

  This resulted in panic across the world, with several European auto supplier plants and production lines already shut down. Indian industry, too, had raised concerns, citing depleting stocks. “This problem was always there and it got accelerated due to the recent tariff war. Midwest is geared up to ease the challenges of the industry,” he said about the current crisis on magnets.

  “We are already in touch with most of the major motor manufacturers in India apart from wind turbine and MRI manufacturers,” he said. 

  IPO-bound Midwest is in the business of integrated mining and processing of quartz grit and powder, catering to the engineered stone, solar glass and semi conductor industry. It is the largest producer and exporter of Black Galaxy Granite (BGG), a premium variety of granite known for its unique aesthetics. It also holds a 23 per cent share of the Indian export market for BGG, according to a Crisil report.

  The company, which also has an 11 per cent share in overall black granite production, is the largest integrated quartz producer in India, with a capacity of 240,000 tonnes per annum in Phase I, catering to the engineered stone, solar glass, and semiconductor industries. 

The production of monazite from Sri Lanka may take at least two years. MAM is collaborating with the Technology Development Board under the Department of Science and Technology to boost its technology, and India Rare Earths Limited will supply the raw materials such as monazite.