Ahmedabad, Feb 10: Indian billionaire Gautam Adani’s conglomerate has signed contracts to buy 1.6 million tons a year of copper concentrate for the world’s largest single-location smelter for the industrial metal.
The first 500,000 tons of capacity at the $1.2 billion facility in Mundra in the western state of Gujarat is set to start operations next month, according to Dr. Vinay Prakash, CEO, Adani Natural Resources, & MD of Kutch Copper Ltd. This will be expanded to 1 million tons by March 2029 to cater for a forecast doubling of Indian copper demand by the end of the decade, he said in an interview.
Adani Enterprises Ltd., the port-to-power conglomerate’s flagship company, is seeking resource security in critical minerals and is resuming capital expenditure. The smelter is starting up just as the global copper market experiences a collapse in the fees that processors charge miners because there’s not enough ore to go around.
A combination of high operating costs and the low fees means smelters and refiners globally may be forced to curtail production, Dr. Prakash said. “Our plant will be a low-cost producer with higher metal recovery and this will help us to remain competitive in the market.”
The concentrate deals are a mix of short- and long-term arrangements, Dr. Prakash said, without disclosing the suppliers. Concentrate supply is likely to increase in the medium- to long-term as more mining projects, including in Africa and Peru, come on stream, he said.