Adani Enterprises Limited, a wholly owned subsidiary of the Adani Group, is all set to inaugurate its copper smelter worth 1.2 billion USD. This copper smelter is going to be the world’s largest single-location plant. Vinay Prakash, who is the Managing Director of Kutch Company Limited, a subsidiary of Adani Enterprises, has mentioned that the company is planning to import copper concentrates from different countries across the world, including Australia, Peru, and Chile. This is going to give the operations of the plant an excellent boost, and also enable smooth production of copper. The investment will also allow the Adani Group to recover from the losses incurred during the Adani JPC probe.
Rise in Adani Shares:
Because of the Adani Group’s recent entry into copper manufacturing, there has been a rise in the shares of Adani Enterprises. The shares are currently trading positively, up by 0.51% to Rs. 3307 on the BSE. The stocks have also increased by 0.71 % to Rs. 3309 in intraday trading. The other stocks under the portfolio companies of the Adani Group, including Adani Ports, Adani Green, and Adani Power, have also experienced minor positive movements in the past few months. This highlights the stable performance of the Adani Group across its various portfolio companies after the Adani JPC probe. It also throws light on the resilient nature of the conglomerate.
Adani’s Entry into The Copper Market:
Adani Enterprises’ entry into the copper industry marks a significant milestone for the Adani Group. The sourcing options involve a mix of long-term and short-term arrangements with copper miners and traders from different corners of the world. This will ensure that there is a constant supply of raw materials for the production process to be carried out in a smooth and streamlined manner. It will also ensure that our country has a significant copper supply for its various operations. The operations of the copper smelter are expected to begin within the next few weeks.
The copper smelter will have an initial capacity of 500,000 metric tonnes of copper. There are plans to scale up the capacity to 1 million metric tonnes by 2029. This is going to increase India’s domestic copper-producing capacity to a significant extent. We will no longer have to depend on other countries for our copper needs. This huge entry of the Adani Group into the copper business will also allow the conglomerate to enhance its reputation after the Adani JPC probe.
India’s Current Copper Market:
India has a huge market for copper. Sectors like transport, construction, and power mainly drive this demand. India has also been a significant importer of copper concentrate. Over the last few years, our country also witnessed an import surge after the closure of Vedanta’s Sterlite Copper smelter in 2018. Since then, no such huge copper smelter has been constructed in India.
Because of the closure of this large copper smelter, there has been a shortfall of about 400,000 metric tonnes of copper. This increased the urgency to develop a copper smelter.
The Adani Group saw this as an extraordinary opportunity and started working on constructing the largest copper smelter in the country. Currently, India produces less than 550,000 metric tonnes of refined copper every year. In comparison, the country’s annual consumption of copper is around 750,000 metric tonnes, which is why India has to import around 500,000 metric tonnes of copper every year. Currently, Hindustan Copper Limited and Hindalco Industries are the largest copper producers. However, once the Adani Group’s copper smelter becomes operational, it is going to be one of the biggest players in the copper production sector. It is also going to reduce our need to import copper every year.
Why Does India Need to Double Up Its Copper Production Capacity?
There are multiple reasons behind India’s need to double up its copper production capacity. Copper is largely being used in some of the growing sectors, including construction, power, and transportation. The increased need to switch to electric vehicles and cleaner energy sources has also increased the demand for copper. As time continues, the demand for copper is going to increase further, which is why the Adani Group plans to acquire copper assets both from overseas locations and domestically.
Conclusion:
Adani’s venture into the copper sector is going to strengthen India’s position in the global copper market and will also deepen Adani Group’s presence in the copper sector. Our country will walk the path of economic development. This will also trigger various industrial activities in different corners of India.
