Adani Group's $1.2 Billion Kutch Copper Project In Gujarat To Start Operations From March 2024

The first phase of Adani Group's $1.2-billion copper manufacturing facility at Mundra in Gujarat will start operations by March-end.

Touted as the world's largest single-location copper manufacturing plant, the facility will help cut India's dependence on imports and strengthen the country's shift towards electric vehicles (EVs) and renewables.

Kutch Copper Limited (KCL), a subsidiary of Adani Enterprises Limited (AEL) is setting up a greenfield copper refinery project for the production of refined copper, with a capacity of 1 million tonne per annum (mtpa) in two phases.

While the first phase of the project with a capacity of 0.5 million tonnes per annum will be operational by March 2024, full-scale 1 million tonnes capacity will be achieved by FY29 (March 2029).

Earlier in June 2022, the KCL had achieved financial closure for the first phase, by executing a financing document with a consortium of banks led by State Bank of India for the syndicated club loan.

The consortium of banks including Bank of Baroda, Canara Bank, EXIM Bank of India, Indian Bank, Punjab National Bank, and Bank of Maharashtra, had sanctioned the entire debt requirement of Rs 6,071 crore for Phase-1 of the KCL Project.

As per details, the plant will produce 500,000 tonnes of refined copper per annum in Phase I with byproducts, nearly 25 tonnes of gold, 250 tonnes of silver, 1.5 million tonnes of sulphuric acid, and 250,000 tonnes of phosphoric acid. The Phase II expansion will increase the refined copper capacity up to 1 million tonnes per annum.

Rising Copper Import

The government's emphasis on infrastructure development, combined with a robust resurgence in economic activities across various sectors such as real estate, consumer durables, and electric vehicle manufacturing, has significantly boosted the demand for the red metal.

India used to be a net exporter of copper until FY18, when the Tamil Nadu based Vedanta-owned Sterlite Copper was shut down and since then, the country has become a net copper importer for the fifth year in a row.

The country’s copper import in FY21 and FY22 stood at 238,483 tonne and 238,694 tonne respectively. However, copper imports of 275,341 tonne in FY23 were still lower than the pre-Covid high of 357,423 tonne recorded in FY20.

The strategically located Adani’s copper plant at Mundra on the west coast, has the potential to alleviate India’s supply concerns and comes close on the heels of Vedanta‘s effort to restart a long-shuttered 400,000 tonnes plant at Tuticorin in Tamil Nadu.

Sources said the location of Mundra provides the additional advantage of access to lower cost and uninterrupted energy supply and logistical infrastructure to cater to domestic and international demand.

On the operational front, the company is engaged in long-term supply agreements for the key raw material — copper concentrate.

This, along with strategic location and integrated value chain advantage, will help Kutch Copper to be one of the most sustainable and lowest-cost copper producers in the world, according to sources.