Adani Group's Debut Into Metal Sector: $1.2 Billion Copper Plant Starts Operations In Gujarat

Adani Group announced the inauguration of its maiden copper plant in Mundra, Gujarat.

Adani Enterprises Limited's copper business subsidiary, Kutch Copper Limited (KCL), has set up the greenfield copper refinery project for production of refined copper, with a capacity of one million tonne per annum (mtpa) in two phases.

The first phase of the project will be of 0.5 mtpa capacity. An investment of close to $1.2 billion would be injected into the first phase of the project. This significant venture marks the Adani Group's debut into the metal industry.

Gautam Adani, Chairman of the Adani Group, expressed his enthusiasm, stating, "With Kutch Copper commencing operations, the Adani portfolio of companies is not only entering the metals sector but also driving India's leap towards a sustainable and self-reliant future."

He further emphasised the group's commitment to positioning India at the forefront of the global copper sector and achieving carbon neutrality by 2070. Adani highlighted the pivotal role of the domestic copper industry in achieving this goal, stressing the importance of green infrastructure and environmental stewardship.

Adani affirmed, "When commissioned, our modern smelter will set new benchmarks in copper production, with an enhanced thrust on innovative green technology," reports The Hindu.

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.

The Rs 8,783 crore greenfield project, with equity investment by the parent Adani Enterprises Ltd, has got all the major approvals in place to ensure timely execution.

Rising copper import

The demand for copper is expected to surge, driven by various sectors such as renewable energy, electric vehicles, charging infrastructure, and power transmission and distribution networks.

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 FY 21 and FY 22 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 its Thoothukudi (Tuticorin) plant.

Vedanta-owned Sterlite Copper, in June 2023, has come out with a fresh expression of interest for supply of raw materials, as part of its preparatory measures to restart production at its Thoothukudi unit 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.