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Sunday’s Union Budget announcement that Kerala has been picked, along with Andhra Pradesh, Odisha and Tamil Nadu, for establishing Dedicated Rare Earth Corridors should bring cheer to the State government as this initiative had featured prominently on its Union Budget wish list as well as in the 2026-27 State Budget that was tabled in the Assembly on January 29.
In its wish list presented in January in New Delhi ahead of the Union Budget, Kerala had sought ₹1,000 crore “for targeted financial support for corridor infrastructure, technology acquisition, and related development.” Through this project, Kerala seeks to become “the permanent magnet hub of the nation,” as Kerala Finance Minister K.N. Balagopal stated in the State Budget.
On Sunday, presenting the Union Budget, Ms. Sitharaman had announced that the Centre would support the four mineral-rich States for setting up “dedicated rare earth corridor” to “promote mining, processing, research and manufacturing.”
Abundance of rare earth elements
According to the State government, its coast line has an abundance of rare earth elements such as thorium and scandium that are required in areas, including space research and defence, energy generation, aviation sector, and production of electric vehicles. In its Union Budget wish list, Kerala had sought the establishment of a Dedicated Rare Earth Corridor, pointing out that Kerala has 32.435 million tonnes of mineral-sand reserves along its coast, including nearly 1.9 million tonnes of monazite.
Responding to Ms. Sitharaman’s announcement, Mr. Balagopal said that Kerala, through its proposal, aims to have industries based on the minerals established in Kerala. The State does not want to have the minerals merely mined and carted off outside the State.
According to Kerala’s proposal, this corridor should link Vizhinjam where the new international seaport is situated, with Chavara in Kollam district where the Kerala Minerals and Metals Ltd. (KMML) is situated, and Kochi “for the domestic production of permanent magnets.” Through the establishment of the corridor, Kerala is eyeing an investment of ₹42,000 crore and 50,000 job opportunities.
Permanent magnets
In the State Budget which Mr. Balagopal presented on January 29, ₹100 crore had been earmarked for establishing a Rare Earth Critical Minerals Mission in partnership with KMML, KELTRON and Non-Ferrous Materials Technology Development Centre (NFTDC). Kerala expects that this initiative would support industrial requirements, while substantially reducing India’s dependence on imported rare-earth magnets. “The monazite is relatively free from clay and other impurities, making it easier to process. Approximately 25% of the rare earth oxides (REO) are Neodymium and Praseodymium, which are essential for producing permanent magnets used in defence, aerospace, and aeronautical applications,” Kerala had suggested to the Centre in January at a pre-Budget consultation called by Ms. Sitharaman.
That said, the actual implementation of this project is likely to demand deep studies and safeguards given Kerala’s ecological vulnerabilities and coastal and mining-related issues. At present, large-scale mining activities in Kerala are confined to heavy mineral sands, China clay and, to a lesser extent, limestone/lime shell, silica sand and granite. In 2024-25, mining and quarrying accounted for an estimated value of ₹2,57,598 lakh at constant prices in Kerala’s Gross State Value Added (GSVA), according to Economic Review 2025 prepared by the State Planning Board.
Published – February 01, 2026 07:14 pm IST
