Adani’s Kutch Copper could fill the Sterlite Copper gap

In a sense, the copper business has a high correlation with the growth of the economy, although copper prices tend to be quite cyclical depending on the global vagaries of supply. Among the largest copper producing mines in the world are located in Latin American countries like Peru and Chile. The story is about Kutch Copper, a subsidiary of Adani Enterprises, attaining financial closure for its proposed 1 million tonne per annum (MTPA) copper greenfield refinery project located in Mundra in the Kutch region of Gujarat.

The plans of the company are both; ambitious and aggressive. It just achieved financial closure of Rs6,071 crore for the first phase, which is funded by a consortium of banks led by State Bank of India. The other members of the consortium include BOB, Canara Bank, EXIM Bank, Indian Bank, PNB and Bank of Maharashtra. This financial closure 8is towards Phase-1 of the project which entails setting up capacity of 0.50 MTPA at Mundra, Gujarat. The plant will go a long way in bridging the deficit in copper production in India.
 

What happened to Sterlite Copper?

No discussion on copper in India would be complete without dwelling at length on the Sterlite Copper saga. Sterlite Copper, part of the Vedanta group, had set up a 400,000 TPA copper refining plant in Thoothukudi, which had been the scene of numerous protests even as it was operating in the coastal town of Tamil Nadu. In 2018, Sterlite Copper announced plans to double the capacity to 800,000 TPA and that let the cat among the pigeons. The news was marked by violent protests, forcing the police to be called in on emergency basis.
 

In the police firing that followed, 13 persons were killed and more than 100 were injured. That is when, the government of Tamil Nadu intervened and shut down the Sterlite Copper plant in May 2018. The plant has remained shut ever since with even the Supreme Court refusing to give the company permission to resume operations at the premises. This resulted in India shifting from being a net copper exporter to a net copper importer. Now Vedanta is planning to exit the plant and that could make the Kutch copper plant timely.
 

Copper and the massive renewables opportunity

If there is one big trend that will drive the demand for copper in a big way, it is the shift towards renewables. For example, everything from renewable power plants to electric vehicles need a lot of copper due to its special qualities. The move by Kutch Copper Ltd is a move towards ensuring that there is enough copper to steamroll the plans of the Indian government to engineer a massive shift in favour of renewable energy sources and for greener and cleaner electrical vehicles.

Copper is at the core of both these shifts.

When the full Kutch Copper complex comes on stream, it would be the largest copper refineries anywhere in the world. It will be 2.5 times the size of the Sterlite Copper current capacity and 25% more than the proposed enhanced capacity of Sterlite Copper. The idea of Kutch Copper is also to gradually foray into related segments like the manufacture of copper cathodes, copper rods and associated products. It remains to be seen; how much Kutch Copper actually benefits from the absence of Sterlite Copper.