Adani Group's Kutch Copper To Start Smelter Operations In Gujarat's Mundra Soon: Report

The Adani Group's Kutch copper smelter is expected to begin operations in the coming weeks, Economic Times reported citing sources familiar with the development.

After the stabilisation of the 500,000-tonne unit over the next two to three quarters, the unit will be expanded to reach a capacity of one million tonnes.

The expansion is projected to cost between $700-800 million, bringing the total cost of the facility to around $2 billion.

Upon completion, the Mundra-based smelter will rank among the largest single-location smelters globally.

According to the ET report, analysts suggest that once the smelter achieves full ramp-up in the upcoming fiscal year, its operations could generate earnings before interest, tax, depreciation, and amortization (EBITDA) in the range of $250-300 million on a full-year basis.

Initially, Kutch Copper will be sourcing its copper concentrate from Latin America, but the company is also in talks with suppliers from Australia and Africa to diversify its sources of supply.

Kutch Copper is fully owned by Adani Enterprises, the Adani Group's incubator firm.

Once operations commence, it is expected to significantly reduce India's copper imports.

According to the sources cited in the ET report, around 40 per cent of the copper produced will be utilised within the Adani Group, primarily for its renewable energy and transmission sectors.

The second phase of the smelter, expected to commence after stabilising the initial 500,000-tonne unit, will likely be funded through cash flows generated by the current operations.

The decision for expansion is unlikely to be taken before FY27, according to the report.

Quarterly demand for refined copper in India has varied between 201,000 and 218,000 tonnes, with imports fulfilling about a quarter of the demand.

Birla Copper, owned by the Aditya Birla Group and part of Hindalco Industries, operates India's only other large copper smelter.

Situated in Dahej, Gujarat, the 500,000-tonne plant earned an operating profit of Rs 2,411 crore (about $280 million) from April to December.

Global copper production totaled 6.8 million tonnes in the December quarter, while consumption reached 6.9 million tonnes.

India is a net importer of copper and has limited copper ore resources.

Hindustan Copper, a state-owned enterprise, is the only domestic copper miner, although the JSW Group has recently entered copper mining.

Also Read: NITI Aayog To Launch Portal With 30 Years Of Data On Social, Economic, And Fiscal Trends Across All States