Billionaire Gautam Adani-led conglomerate’s copper-producing factory in Gujarat’s Mundra will begin operations from March next year, helping reduce India’s dependence on imports and help in energy transition, sources said.
Copper is known as the “metal of electrification” because deep electrification requires wires, which are primarily made of copper. Technologies critical to the energy transformation, such as electric vehicles (EV), charging infrastructure, solar photovoltaics (PV), wind and batteries, all require copper.
Kutch Copper Limited (KCL), a subsidiary of group flagship Adani Enterprises Limited (AEL), is setting up a greenfield copper refinery project to produce 1 million tonnes of refined copper per annum in two phases.
For Phase-I, the 0.5 million tonnes per annum capacity, KCL has achieved financial closure through a syndicated club loan, said sources with direct knowledge of the matter. The first phase is expected to be commissioned by the end of the current financial year, he added.
A few days ago at the company’s AGM, Adani had said, “Out of the many ongoing projects, two major projects include the Navi Mumbai airport and the copper smelter, and both are on schedule.”
The Rs 8,783-crore greenfield project completed a full loan agreement with a consortium of banks led by SBI earlier this year, he said, adding that the entire loan requirement of Rs 6,071 crore for Phase-I has been provided by the consortium of banks.
The equity for the project has been infused by the parent company Adani Enterprises Limited. Moreover, it has got all the major approvals to ensure timely execution.
Copper is the third most widely used industrial metal after steel and aluminum, and is increasingly in demand due to the rapidly growing renewable energy, telecommunications and electric vehicle industries.
India’s copper production has been unable to meet this demand, and domestic supply disruptions have led to increased dependence on imported copper. India’s imports have been increasing continuously for the last five years.
According to government data, for FY23 (April 2022 to March 2023 financial year), India imported a record 1,81,000 tonnes of copper, while exports fell to a record low of 30,000 tonnes, which is even lower than during the pandemic period.
It is estimated that the country will consume 7,50,000 tonnes of copper in FY23 (612 KT in FY22). This number is expected to grow to 1.7 million tonnes by 2027 due to huge demand from the green energy industry.
Global demand for copper from solar photovoltaic (PV) installations alone is estimated to double to 2.25 million tonnes in the current decade.
Sources said Adani Group, which is rapidly expanding its renewables portfolio, will be a significant consumer of the red metal.
The strategically located plant at Mundra on the west coast will play a significant role in the development of green energy infrastructure and encourage ‘Make in India’. The project has the potential to make the Mundra Special Economic Zone the hub of a downstream ecosystem of value-added copper products in the future.
Sources said the location offers the added advantage of low cost and access to uninterrupted power supply and logistic infrastructure to meet domestic and international demand.
On the operational front, the company is engaged in long term supply agreements for key raw material – copper concentrate. According to sources, the strategic location and integrated value chain advantage will help Kutch Copper become one of the most sustainable and lowest-cost copper producers in the world.
In keeping with the Group’s ESG priorities, the sustainable solution-based project design of the plant will result in zero liquid discharge. It will explore harnessing green energy and deploying the by-products for cement and other businesses.
In addition, the plant will produce 25 tonnes of lead per year, 250 tonnes of silver and 1,500 kilotonnes per year (ktpa) of sulfuric acid and 250 ktpa of phosphoric acid as a by-product. India imports about two million tonnes of sulfuric acid, a key raw material for the manufacture of phosphatic fertilizers, detergents and specialty chemicals.
Globally, copper production is more concentrated than oil. The two top producers – Chile and Peru – account for 38 percent of world production. Growth in demand during the energy transition – moving from fossil fuels to renewable sources of energy – is expected to be evident in the US, China and Europe, apart from India. By 2035, the US is projected to import up to two-thirds of its copper needs.