Adani's $1.1 Billion Copper Project Set To Boost India's Energy Transition

The Adani Group, led by billionaire Gautam Adani, is gearing up to commence operations at its copper-producing factory in Mundra, Gujarat, in March next year. This greenfield copper refinery project, undertaken by Kutch Copper Ltd (KCL), a subsidiary of Adani Enterprises Ltd (AEL), is expected to play a significant role in reducing India's reliance on copper imports and supporting the country's energy transition efforts.

Copper, often referred to as the "metal of electrification," is crucial for various technologies central to the energy transition, including electric vehicles (EVs), charging infrastructure, solar photovoltaics (PV), wind energy, and batteries.

The project is set to be executed in two phases, with the first phase having a capacity of 0.5 million tonnes per annum and achieving financial closure through a syndicated club loan. The company is targeting the first phase to become operational by the end of the current fiscal year.

Gautam Adani, at the company's recent Annual General Meeting, affirmed that both the Navi Mumbai Airport and the Copper Smelter projects are progressing as planned.

Total cost 

The total project cost for the greenfield copper refinery is estimated at Rs 8,783 crore, and a consortium of banks led by SBI has provided the full debt tie-up for the project. Phase-1, requiring Rs 6,071 crore of debt, has received the necessary funding.

Given the rising demand for copper in various industries, including renewable energy, telecom, and EVs, India's domestic copper production has struggled to meet the growing requirements, leading to increased reliance on copper imports. In the fiscal year FY23 (April 2022 to March 2023), India imported a record 1,81,000 tonnes of copper, with exports plunging to a record low of 30,000 tonnes, even lower than during the pandemic period.

To meet the growing copper demand in the country, India is expected to consume 7,50,000 tonnes of copper in FY23, with the number projected to rise to 1.7 million tonnes by 2027, primarily driven by demand from the green energy industry.

The strategically located copper plant in Mundra, Gujarat, is expected to become a vital component of India's green energy infrastructure development and promote the "Make in India" initiative. With access to a cost-effective and uninterrupted energy supply and a robust logistical infrastructure, the project has the potential to create downstream ecosystems of value-added copper products within the Mundra Special Economic Zone.

ESG priorities 

In line with the group's environmental, social, and governance (ESG) priorities, the plant's project design will focus on sustainability, incorporating solutions for zero liquid discharge. Additionally, the project aims to utilise green power and explore the use of byproducts for cement and other industries.

The copper refinery is also expected to produce byproducts, including 25 tonnes per annum of gold, 250 tonnes of silver, 1,500 kilotonnes per annum (KTPA) of sulphuric acid, and 250 KTPA of phosphoric acid. This production will help reduce India's dependence on sulphuric acid imports, a critical raw material for manufacturing phosphatic fertilisers, detergents, and speciality chemicals.

Globally, copper production is concentrated, with Chile and Peru accounting for 38 per cent of world production. As the global energy transition progresses, demand growth for copper is projected to be significant in the US, China, Europe, and India. By 2035, the US is anticipated to import up to two-thirds of its copper needs, highlighting the global importance of copper in the transition to renewable energy sources.

(With PTI inputs)