Indian billionaire Gautam Adani’s conglomerate has signed contracts to buy 1.6 million tons a year of copper concentrate for the world’s largest single-location smelter for the industrial metal.
The first 500,000 tons of capacity at the $1.2 billion facility in Mundra in the western state of Gujarat is set to start operations next month, according to Vinay Prakash, chief executive officer at Adani Natural Resources. This will be expanded to 1 million tons by March 2029 to cater for a forecast doubling of Indian copper demand by the end of the decade, he said in an interview.
Adani Enterprises Ltd., the port-to-power conglomerate’s flagship company, is seeking resource security in critical minerals and is resuming capital expenditure now that its shares have stabilized after a short-seller attack in January 2023. The smelter is starting up just as the global copper market experiences a collapse in the fees that processors charge miners because there’s not enough ore to go around.
A combination of high operating costs and the low fees means smelters and refiners globally may be forced to curtail production, Prakash said. “Our plant will be a low-cost producer with higher metal recovery and this will help us to remain competitive in the market.”
The concentrate deals are a mix of short- and long-term arrangements, Prakash said, without disclosing the suppliers. Concentrate supply is likely to increase in the medium- to long-term as more mining projects, including in Africa and Peru, come on stream, he said.
(By P R Sanjai and Swansy Afonso)
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