India’s new copper plant finally starts amid ore shortage

A new copper smelter owned by Indian billionaire Gautam Adani started processing mined ores this week after multiple delays due to a lack of feedstock, according to people familiar with the matter.

The 500,000-ton-a-year Kutch Copper plant in Gujarat is part of a copper-producing complex that Adani is building to cut India’s reliance on imported metal. The smelter was scheduled to start in 2024, but faced delays as smelter expansions elsewhere fueled a global shortage of ores.

Raw materials are now being fed into the plant, but it could take 18 months for it to fully ramp up, said the people, who asked not to be identified due to the commercially sensitive nature of the matter. A typical ramp-up period is about two to three months.

For the smelter to operate at full scale, it would require about 1.6 million tons of concentrated copper ores, some of the people said. Industry consultancy CRU Group has estimated that the gap between the volume of concentrates sought by smelters and those actually supplied by miners will reach 1.2 million tons this year, the biggest deficit in at least a decade.

Kutch Copper has operationalized the smelter and is in the process of ramping up production to achieve peak capacity as soon as possible, a spokesperson for Adani Enterprises Ltd said in an emailed statement.

Procuring concentrates has been a challenge for smelters globally, with growing competition from new plants fueling a collapse in processing margins.

The surge in capacity is being driven partly by the commissioning of new integrated plants at mining operations in Indonesia and the Democratic Republic of Congo. That’s reducing the flow of concentrates that would have otherwise been sold to other smelters.

But the biggest contributor has been the breakneck growth of standalone smelters that buy most or all of their raw materials on the open market. That includes the new Adani plant, as well as several major operations in China, such as a new 500,000-ton-a-year copper smelter commissioned by Tongling Nonferrous Metals Group Co. earlier this year.

(By Julian Luk and Archie Hunter)