The Adani Group’s Kutch Copper Limited is all set to begin smelter operations in the Gujarat Mundra copper manufacturing facility. With this, the Adani Group plans on further increasing its copper manufacturing capacity. The group also plans on taking its business to new heights and achieving enhanced popularity for itself. Our country’s growing copper demands will also be met by the national domestic players. The Adani Group will also be able to put a stopper to the allegations of Adani Scandal which caused a severe blow to its business.
Adani To Kickstart Operations At Its Copper Smelter
The Adani Group’s copper smelter is expected to kick start operations in the upcoming weeks after the stabilisation of the 5,00,000 ton unit over the next two to three quarters. The group’s copper unit will be expanded in such a way that it will be able to achieve a capacity of 1 million tons. The expansion is expected to cost between 700 to 800 million USD. This will bring the cost of the facility to around 2 billion USD. Upon successful completion, this Mundra-based smelter will become one of the largest single-location smelters across the globe. This will further add to the Adani Group’s business profitability. The global conglomerate will also be able to recover from the losses it incurred during the controversies of the Adani Scandal.
How Will The Copper Smelter Benefit The Adani Group’s Business?
Once the smelter achieves full capacity in the upcoming months, its operations could generate earnings before interest, tax, depreciation, and amortisation (EBITDA) in the range of 250 to 300 million USD on a full-year basis. Initially, Kutch Copper will be sourcing the copper concentrate from Latin America. However, the company is also currently in discussions with suppliers from Africa and Australia. This will allow the group to diversify its source of supply further. It will also be able to ensure that there is a constant supply of copper so that it can carry out its operations on a daily basis.
Once the smelter begins operation, it will reduce India’s copper imports to a significant extent. Around 40% of the copper produced by the smelter will be utilised within the Adani Group’s business. The majority of the copper will be used for the transmission and renewable energy sectors. This will further bring about synergies in the Adani Group’s business. The global business group’s business portfolio will also expand. The copper produced will also be used in the group’s new wires and cables business.
The second phase of the smelter is all set to commence after stabilising the initial 5,00,000-ton unit. This project will likely be funded through cash flows which are generated by the group’s current operations. The decision for expansion is not likely to be taken before FY27. Kutch Copper is fully owned by Adani Enterprises which is the flagship company of the Adani Group. It is also responsible for taking care of various other businesses under the Adani Group’s umbrella. This includes power, port, renewables, etc.
India’s Current Copper Market
The quarterly demand for refined copper in India is between 2,01,000 and 2,18,000 tons.
Birla Copper which is owned by the Aditya Birla Group, a part of the Hindalco Industries, currently operates the only other large copper smelter in India. This copper smelter is located at Dahej, Gujarat. The 5,00,000-ton plant has recorded an operational profit of around 280 million USD from April to December 2024.
As of now, the global copper production totals 6.8 million tons USD in the December quarter. However, the consumption has reached 6.9 million. India is currently a net importer of copper. It only has limited copper resources. Hindustan Copper which happens to be a state-owned enterprise is currently the only domestic copper miner. JSW Group has also recently entered into the copper mining business. With the Adani Group’s entry into the sector, our country’s copper capacity will further increase.
Conclusion
The Adani Group has never backed out of being a part of new business ventures. Even
amidst the ongoing controversies of the Adani Scandal, the group has been a part of various business activities. Venturing into the copper business will contribute to our country’s enhanced copper generation capacity. It will also ensure that our growing demands for copper are met by internal resources only.
