The Gautam Adani-led conglomerate is underway with the construction of the largest single-location copper manufacturing facility globally in Mundra, Gujarat. This strategic move aims to reduce India's reliance on copper imports, fostering the nation's energy transition. Sources indicate that the USD 1.2 billion plant will initiate its first phase by March-end, reaching its full-scale 1 million tonnes capacity by March 2029.
Kutch Copper Ltd (KCL), a subsidiary of Adani Enterprises Ltd (AEL), is spearheading the greenfield copper refinery project. The refinery, designed for refined copper production with a 1 million tonnes per annum capacity in two phases, achieved financial closure for Phase-1 through a syndicated club loan in June 2022.
Adani's vision extends to becoming a global leader in the copper industry by 2030, leveraging the group's strengths in resource trading, logistics, renewable power, and infrastructure. With India's per capita copper consumption at 0.6 kg, significantly lower than the global average of 3.2 kg, the Adani Group aims to meet the surging domestic demand driven by clean energy initiatives and the rising popularity of electric vehicles.
Copper, the third most utilized industrial metal, plays a pivotal role in technologies crucial for the energy transition, such as electric vehicles, charging infrastructure, solar photovoltaics, wind, and batteries. Despite the growing demand, India's copper production has struggled to meet requirements, resulting in increased dependence on imported copper.
In FY23, India imported a record 1,81,000 tonnes of copper, emphasizing the urgent need for domestic production. Adani's investment aligns with India's push for clean energy systems, with an anticipated doubling of domestic copper demand by 2030. The group's expansion into copper manufacturing complements its existing capabilities, ensuring a strategic fit within the energy transition landscape.
The Mundra plant by Kutch Copper is set to produce copper cathodes and rods, along with valuable byproducts such as gold, silver, selenium, platinum, and sulphuric acid. This integrated complex will contribute to reducing India's dependence on imported sulphuric acid, producing 500,000 tonnes of refined copper annually in Phase I. The Phase II expansion aims to increase the refined copper capacity to 1 million tonnes per annum.
Scheduled for operational readiness in 2024, Adani's copper plant coincides with Vedanta Ltd's efforts to reopen a long-shuttered 400,000-tonne plant in Tamil Nadu. The waste-to-value strategy of Adani's plant involves utilizing copper slag in road construction, cement, and other applications, creating new markets.
Addressing concerns about the impact on global copper prices, sources indicate that India's new exploration and auction policy will lead to more operational copper concentrate assets. Additionally, upcoming mining projects globally are expected to balance the demand and supply of copper concentrate in the medium term.
As a proponent of 'green copper,' Adani emphasizes environmental sustainability in the copper smelting process, aiming for lower greenhouse gas emissions. Long-term supply agreements for copper concentrate, strategic location, and an integrated value chain give Kutch Copper a competitive edge, positioning it as one of the most sustainable and cost-efficient copper producers globally.
Adhering to the group's ESG priorities, the plant's sustainable design includes a zero-liquid discharge system, exploring the use of green power, and repurposing byproducts for cement and other industries. With global copper production concentrated in a few countries, including Chile and Peru, the Adani Group's foray into copper manufacturing aligns with the escalating demand during the global energy transition.
By 2035, the US is projected to import up to two-thirds of its copper needs, emphasizing the global significance of sustainable copper production in the era of renewable energy sources. Adani's strategic investment positions the conglomerate to play a vital role in meeting the evolving demands of the copper industry worldwide.