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BusinessIndia’s copper industry has a new entrant, incumbents not worried

India’s copper industry has a new entrant, incumbents not worried



Gautam Adani's conglomerate is about to step into a new venture: 's copper industry, boasting half a million tonnes of refining capacity slated for March next year.
Although the incremental capacity doubles India's last year's production, industry executives suggest that Adani poses less of a threat to the incumbents and more to those exporting to India.

For 2022-23 (FY23), India's domestic copper production was estimated at half a million tonnes.
Adani Group is investing over a billion dollars to establish a refining capacity of 1 million tonne (mt), half of which (500,000 tonnes) is anticipated to commence production in March.
With this, Adani's Kutch Copper will join the ranks of the other three refined copper producers in India: Aditya Birla Group's Hindalco Industries, Hindustan Copper, and Anil Agarwal-promoted Vedanta Ltd.
Despite the significant investment, existing companies are not expected to feel intense competition.
“Competition in any sector will lead to improved benchmarks, regulations, and value creation for its stakeholders,” said A Sumathi, chief operating officer for Sterlite Copper, the copper division of Vedanta.
Sterlite Copper's 400,000-tonne smelter in Tuticorin has been closed since 2018 due to pollution-related issues.
Vedanta hopes to resume operations at this unit, subject to a Supreme Court order.
With the closure, India's copper exports have declined, and imports have risen over the past five years.
Adani's copper capacity is expected to help address this deficit to some extent. Nevertheless, Vedanta remains unconcerned about the prospects for Sterlite.
“Even if Sterlite's idle capacity is reinstated, we believe there is ample room for new players to drive robust growth in the sector and the at large,” said Sumathi from Sterlite Copper.
Industry veterans share Sumathi's enthusiasm.
“India's copper demand is expected to reach 3 mt in the next few years.
“Adani's entry will not adversely affect the existing players,” said a former senior executive from the industry.
Lodha from CRISIL estimates that in the near term, the share of imports is set to decrease from 55-60 per cent in FY23 to 40-45 per cent in 2025-26, assuming that the completion and ramp-up of the Adani plant proceeds as scheduled.
For context, India's overall copper imports were approximately 670,000 tonnes in FY23, he stated.
When operating at full capacity, Adani will rival the current largest producer, Hindalco Industries, with its 500,000-tonne capacity at Dahej.
Although Hindalco has not yet announced any new refining capacity additions, the company plans to invest in establishing a 50,000-tonne copper and e-waste recycling facility.
“A heavy requirement for working capital and capital expenditure, complex raw material sourcing, and risk management are some of the obstacles to establishing new capacities in this industry,” said the former industry executive previously

The Northlines is an independent source on the Web for news, facts and figures relating to Jammu, Kashmir and Ladakh and its neighbourhood.

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