Adani Group Secures 1.6 Million Tonne Ore For World's Largest Copper Smelter Facility In Gujarat

Adani Group has signed contract for purchasing 1.6 million tonne of copper concentrate for the world's largest single-location smelter for the metal in Gujarat.

The smelter, a $1.2 billion project located in Mundra, Gujarat, is poised to initiate its first phase with a 500,000-ton capacity next month, according to Adani Natural Resources CEO Vinay Prakash.

The plant's capacity will be increased to 1 million tonne by March 2029, to meet the predicted doubling in demand for copper in India by the decade's end.

Adani Enterprises, 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 stabilised after a short-seller attack in January 2023.

The timing for the smelter's launch aligns with a downturn in the global copper market, highlighted by a plunge in the fees smelters charge mining companies amid a scarcity of ore.

This scenario, coupled with high operational expenses and low processing fees, could pressure worldwide smelters and refiners to reduce production, according to Prakash.

"Our plant will be a low-cost producer with higher metal recovery and this will help us to remain competitive in the market," Prakash said in an interview, Bloomberg reported.

Prakash said that the contracts for copper concentrate comprise both short- and long-term deals, though the identities of the suppliers were not disclosed.

He expressed optimism about the future availability of concentrate supplies, expecting an upturn as new mining ventures, particularly in Africa and Peru, begin production.