Nexon Geochem Plans a ₹1,250 Crore Rare-Earth Magnet Plant in Kakinada to Cut India's Dependence on China

Nexon Geochem has signed a memorandum of understanding with the Andhra Pradesh Economic Development Board (APEDB) to build a ₹1,250 crore plant for sintered neodymium-iron-boron (NdFeB) permanent magnets at Thondangi in Kakinada district. The MoU was signed on 14 October 2026 at a regional conference of the 31st CII Partnership Summit. It is one of the larger private rare-earth magnet plans announced in India so far.

Rare-earth magnets are small but essential. They are the strongest commercially available permanent magnets, and they sit inside the traction motors of electric vehicles, the generators of many wind turbines, industrial robots, drones, consumer electronics and guided weapons. India has almost no capacity to make them.

The plan

According to reports of the MoU:

• Product: sintered NdFeB magnets, the high-performance type used in EV motors and wind turbines, as opposed to cheaper bonded magnets.
• Capacity: 600 tonnes a year.
• Phase 1: ₹750 crore, with operations targeted for April 2029.
• Phase 2: another ₹500 crore to expand capacity by April 2035.
• Land and jobs: about 30 acres, with 886 jobs expected (386 direct and 500 indirect).
• Target markets: electric vehicles, wind energy, industrial automation and defence.

The MoU runs for 12 months, during which APEDB will help with land and regulatory coordination. As with most investment MoUs, it states intent rather than committing anyone to build.

Why India needs magnet capacity

China dominates the global rare-earth supply chain from mining and separation through metal-making to finished magnets, and it produces the large majority of the world's NdFeB magnets. The risk of that concentration became concrete in 2025, when Chinese export restrictions on rare-earth magnets disrupted supply to vehicle makers around the world, including in India. Several Indian two-wheeler and car makers warned of production cuts.

New Delhi responded with a ₹7,280 crore scheme, approved in late 2025, to support domestic manufacturing of rare-earth permanent magnets. Private announcements such as Nexon's are part of a wider effort to build at least a basic domestic capability before EV adoption and wind-power targets push demand much higher.

The hard parts

Making sintered NdFeB magnets is a demanding metallurgical process. Rare-earth oxides have to be reduced to metal and alloyed with iron and boron. The alloy is then crushed into a fine powder in an oxygen-free environment, aligned in a strong magnetic field, pressed, sintered, heat-treated, machined and coated. Good performance depends on tight control of grain structure and chemistry. Premium grades for EV motors often also need heavy rare earths such as dysprosium or terbium to withstand high temperatures, and their supply is even more concentrated than neodymium's.

India has rare-earth resources, mainly in beach sand minerals processed by the state-owned IREL (India) Limited, but very limited capacity downstream of oxides. Nexon's website lists IREL as a raw-material partner. Rare Earth Exchanges, an industry publication, notes that the supply terms have not been independently verified, and that financing for the project is also not yet public.

Nexon has also looked abroad for process know-how. In July 2026 the company announced an agreement with Giredmet, a Russian research institute linked to Rosatom, and spoke of an integrated magnet capacity target of 1,200 tonnes a year by FY2033. How the 600-tonne Kakinada project fits with that larger ambition has not been fully explained.

Why Kakinada

The Andhra Pradesh coast is becoming an industrial cluster for energy-transition manufacturing. Kakinada already hosts a large port and is the site of AM Green's green-ammonia project, and the state has been courting electronics, solar and battery investment. A magnet plant near a port makes sense for importing feedstock and exporting product, and Andhra Pradesh's sands are among India's rare-earth mineral sources.

What it means

At 600 tonnes a year, the Kakinada plant would be small next to China's output, but it would matter at India's current scale. A typical EV traction motor uses on the order of a kilogram or two of NdFeB magnet, so even a few hundred tonnes could supply a meaningful share of India's EV motor production at today's volumes.

The timelines are long, with first output targeted for 2029, and the project is still at the MoU stage. Financing, technology transfer, feedstock contracts and environmental clearances all have to come through. Still, the MoU shows that Indian companies now see rare-earth magnets as a strategic manufacturing opportunity, and states are competing to host them.

Sources

• Business Standard — Nexon Geochem to set up ₹1,250 crore rare earth magnet plant in Andhra
• Autocar Professional — Nexon Geochem to invest ₹1,250 crore in Andhra rare-earth magnet plant
• Deccan Chronicle — ₹1,250 crore rare-earth permanent magnet facility to come up in Kakinada
• Maritime Gateway — Nexon Geochem to invest ₹1,250 crore in 600-tonne rare earth magnet plant at Kakinada
• Rare Earth Exchanges — Nexon Geochem commits $139 million to India's 600 ton rare earth magnet project
• Autocar Professional — Nexon Geochem partners with Russia's Giredmet on rare earth magnets