Adani Group's $1.1 Billion Kutch Copper Project In Gujarat To Start Operations From March 2024

In a major capacity boost for production of refined copper, which will strengthen India’s shift towards EV and renewables, Adani group's copper-producing factory at Mundra in Gujarat will start operations next year.

"Of the several projects underway, two of the key ones include the Navi Mumbai Airport and the copper smelter, and both are on schedule," Gautam Adani said on 18 July while addressing shareholders at Adani Enterprises’ annual general meeting.

Adani Enterprises Limited's copper business subsidiary, Kutch Copper Limited (KCL), is setting up the greenfield copper refinery project for production of refined copper, with a capacity of 1 million tonne per annum (mtpa) in two phases.

The first phase of the project will be of 0.5 mtpa capacity.

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

Copper is the third most used industrial metal, after steel and aluminium.

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, according to sources.