Nexon Geochem plans Rs 1,250 crore rare-earth magnet plant in Kakinada

Nexon Geochem has signed an agreement with the Andhra Pradesh Economic Development Board to build a Rs 1,250 crore plant at Thondangi in Kakinada district that will make rare-earth permanent magnets, the company and state agency announced on October 14, 2026. The plant is planned in two phases, with Rs 750 crore in the first and Rs 500 crore in the second, and a capacity of 600 tonnes of finished magnets a year. The first phase is targeted to start operations by April 2029.

Rare-earth permanent magnets are small parts with a large role in modern industry. They are what make compact, powerful electric motors possible, so they are found in electric vehicles, two-wheeler motors, wind turbines, drones, industrial robots, phones and many defence systems. A sintered magnet is made by pressing fine metal powder and heating it until the particles fuse, which gives the strongest and most stable magnets.

India's problem has been that it does not have a full domestic chain for making them. The Centre's REPM scheme was designed precisely to change that, by backing integrated plants that take rare-earth materials through to finished magnets within the country. A 600-tonne plant is modest next to the country's long-term needs, but it is a real, located, funded project with a time line, which is what the policy needs to move from paper to production.

Location matters too. Andhra Pradesh is actively courting large manufacturing projects: state minister Bharath has set out a target of Rs 23 lakh crore of investment and 20 lakh jobs over five years. For the state, a plant in a high-technology field such as magnets adds to its pitch as a base for electronics and electric-vehicle supply chains, beyond the investment amount itself.

The long timeline is worth noting. With first production targeted for April 2029 and full expansion by April 2035, the project will not change India's magnet supply quickly. The outcome will depend on the company securing land, approvals, technology and a steady supply of rare-earth materials, and on demand from carmakers and electronics firms holding up.

Nexon Geochem rare-earth magnet project at a glance Item | Detail Investment | Rs 1,250 crore (Rs 750 crore phase one, Rs 500 crore phase two) Site | Thondangi, Kakinada district, Andhra Pradesh Capacity | 600 tonnes of finished magnets a year First production | by April 2029 Expansion | by April 2035

Short-term: The MoU sets off land allocation, approvals and detailed project planning. Local businesses in Kakinada may see early demand from construction and services once work begins.

Long-term: If built on schedule, the plant would add domestic supply of a part that Indian makers of electric vehicles, electronics and defence equipment need, and would support the goals of the REPM scheme. It would also create skilled jobs in a field where India has had little manufacturing experience.

Who is affected: Electric-vehicle and electronics manufacturers in India, defence equipment makers, job seekers in Kakinada district and coastal Andhra Pradesh, and the state and central agencies backing domestic rare-earth manufacturing.

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