India's Copper Industry: Current Landscape and Strategic Developments

India's copper industry is undergoing significant transformations to address the growing demand for this essential metal, driven by advancements in renewable energy, electric vehicles (EVs), and infrastructure development. In this article, we look into the current state of India's copper sector, highlighting key developments, challenges, and future prospects.

Current State of Copper Production in India

To start with, let us look at the current state of copper production in India:

Refined Copper Output: In the fiscal year 2024–25, India produced approximately 497,000 metric tons of refined copper, marking a 7.1% increase from the previous year.

Domestic Consumption: Domestic demand for copper is projected to rise significantly, with estimates suggesting a need for 3–3.3 million metric tons by 2030 and up to 9.8 million metric tons by 2047.

Import Dependency: Currently, India imports over 90% of its copper concentrates, a figure expected to increase to 97% by 2047.

Key Industry Players and Initiatives in Copper Industry

1. Hindustan Copper Limited (HCL)

Expansion Plans: HCL aims to triple its copper ore production capacity to 12.2 million tons per year by the end of the fiscal year in March 2031.
Strategic Partnerships: HCL has signed a Memorandum of Understanding (MoU) with RITES Ltd to establish a robust and self-reliant critical mineral supply chain in India.

2. JSW Group

Entry into Copper Sector: In December 2024, JSW Group ventured into the non-ferrous metals sector by acquiring two copper mines in Jharkhand from HCL, marking its entry into the copper industry.

3. Adani Group

Smelter Development: Adani Group has developed Kutch Copper, the largest single-location copper smelter in India, with a capacity of 1.2 million metric tons. The plant commenced operations in 2024 and sources copper concentrates from global suppliers, including Chile's Codelco.

Global Collaborations and Strategic Investments

Here are some details around global collaborations and strategic investments:

International Partnerships: India is actively seeking foreign investments to enhance domestic copper production. The government is in discussions with global mining giants, such as Chile's Codelco and Australia's BHP, to establish smelters and refineries in India. In return, Indian state-owned enterprises are encouraged to invest in these companies' overseas mining operations.

Exploration in Zambia: India has deployed a team of geologists to Zambia to explore copper and cobalt deposits as part of a three-year project. This initiative is part of India's broader efforts to secure critical mineral supplies, which are essential for its energy transition and technological needs.

Drivers of Increased Copper Demand in India

Here are a few factors that is driving the copper demand in India:

Renewable Energy: As India sets ambitious goals to transition to renewable energy, copper has become a crucial component in achieving these targets. Copper is a critical material in solar power generation, wind energy infrastructure, and energy storage systems, all of which are central to India’s green energy push.

As India moves closer to its renewable energy targets, the demand for copper is expected to increase exponentially. This growth is crucial for the country’s energy transition and achieving its climate goals.

Electric Vehicles (EVs): Electric vehicles (EVs) are becoming a critical part of India’s transportation sector as part of its efforts to reduce pollution and dependence on fossil fuels. Copper plays a vital role in the manufacture of EVs due to its efficiency in conducting electricity and its ability to withstand high temperatures.

As EV sales soar in India, the country’s need for copper will increase substantially. The rise in demand will be driven not only by consumer vehicles but also by the growing demand for electric buses and trucks, which also require significant amounts of copper for their electric systems.

Infrastructure Development: India is undergoing a massive infrastructure transformation with projects spanning smart cities, industrial corridors, housing, and national highways. These developments are critical to boosting the country’s economy and improving living standards. Copper, with its excellent conductivity and durability, is indispensable in this era of infrastructure development.

Industrial and Manufacturing Growth: India’s industrial sector is experiencing rapid growth, driven by initiatives such as Make in India and a growing focus on manufacturing and exports. Copper is widely used in various industries, including electrical manufacturing and automotive production.

Challenges Being Faced by Copper Industry

Despite the growth in demand, the copper industry faces challenges. Here are some challenges the industry has to deal with:

Resource Limitations: India is estimated to have about 12.2 million metric tons of copper resources, but only about 18% of this is classified as proven reserves. This means that the country doesn't have enough copper readily available for extraction in the long term. Due to the relatively small amount of recoverable reserves, India is heavily reliant on copper imports, accounting for more than 90% of the country’s copper needs.

As reserves diminish, the cost of extraction may rise, and India will face increasing competition for the limited resources. The limited domestic supply and the dependence on imports make India vulnerable to global supply disruptions, which could lead to price volatility and supply shortages in the future.

Supply Chain Vulnerabilities: Major copper-producing countries, such as Chile, Peru, and the Democratic Republic of the Congo (DRC), have experienced significant political instability, which can disrupt copper supply chains. India’s dependence on these nations for copper concentrates and refined copper leaves it exposed to risks arising from these geopolitical tensions.

These supply chain vulnerabilities can lead to fluctuations in copper prices and supply shortages, making it harder for Indian industries to maintain stable operations. In extreme cases, it could impact industries such as electric vehicles and renewable energy, which are crucial for India’s future growth.

Environmental Concerns: The Sterlite Copper smelter in Tamil Nadu, operated by Vedanta, was shut down in 2018 due to severe ecological concerns, particularly air and water pollution. This decision significantly impacted India's copper production capacity, as Sterlite was the country’s largest copper smelting facility. The closure disrupted both production and supply chains.

As public concern about pollution and climate change grows, companies in the copper industry will face increasing pressure to adopt environmentally responsible practices. This could lead to higher costs and regulatory hurdles, further complicating the industry's efforts to scale up production.

Future Outlook

India's copper industry is poised for significant growth, driven by strategic investments, international collaborations, and increasing demand from emerging sectors. However, addressing challenges related to resource availability, supply chain security, and environmental sustainability will be crucial for ensuring a stable and self-reliant copper sector in the future.