New Delhi making vigorous search for outsourcing Copper from Peru, Chile, Congo
By Kunal Bose
Japan is a shining example of remaining a powerful entity in the global steel industry in terms of capacity and production volume but more by way of technology prowess. This is in spite of it remaining perennially wholly dependent on imports of principal steelmaking ingredients. The world’s third largest maker of the ferrous metal after China and India, Japan produced 84 million tonnes in 2024, a fall of 3.4 per cent over the previous year in alignment with domestic and global economic reality. In a testimony of what global trade cooperation could achieve, the entire Japanese steel production is based on imports of iron ore and metallurgical coal. The country spent nearly $11.6 billion in 2024 to buy 98 million tonnes of iron ore from Australia, Brazil and Canada. In metallurgical coal too, Japan will depend on supplies, principally from Australia to feed blast furnaces.
Not Japan alone, the steel leviathan China in a strategic move to widen the sources of procurement of industrial raw materials, particularly beyond Australia and Brazil, has been scouting the world over for mineral resources for over two decades. In this search, the focus has remained on Africa where is found in abundance host of minerals, including iron ore, bauxite, copper ore and coal. Springing a major surprise and shock to the US, China steadily spread its political influence in Africa using economic baits such as investments in opening of mines along with development of rail, road and port development.
Some years ago, China pulled off a commercial coup when it became a major partner for the development of iron ore mines at Simandou in Guinea. Not only does Simandou hold the world’s largest very high-grade deposits of iron ore, but its fully projected development could bring about transformative changes in the Guinean economy. By 2030 as Simandou reaches full capacity of 120 million tonnes, the seaborne trade in the commodity will feel a major impact allowing the Chinese steel industry to breathe easily.
Besides steel, China has a dominant share of global aluminium and copper smelting capacity. Like the country’s steel mills, groups engaged in producing aluminium and copper depend largely on imports of bauxite (for alumina refineries) and copper concentrate. During 2024, the country imported 158.77 million tonnes of bauxite and 28.1 million tonnes of copper concentrate. Having developed such major capacities in ferrous and non-ferrous metals, it is important for Beijing to organise sustainable sources of supply of raw materials without overly depending on one or two countries.
For Beijing, it is imperative to cut out political risk in procurement of raw materials of foreign origin. That will explain it approaching resource rich but poor countries in Africa with the irresistible bait for the host countries of simultaneously investing in infrastructure building and mines development. Of late China’s relations with Australia have improved. But Australia being a member of Quad (Quadrilateral Security Dialogue) and a close ally of the US, Beijing will remain cautious in dealing with Canberra. Moreover, because of growing resource nationalism, as is particularly evident in Indonesia, China’s raw materials security concern remains at a high level.
No matter whether a country like India has the resources to support production of a metal that finds application in electrical, electronics, green energy, construction, transport and medical equipment, it must not be deterred in any way from growing capacity of that strategic alloy. As it would be, India’s development, particularly in the green energy sector, electronics and electric vehicles (EVs) has created ideal condition for Hindalco and Adani to build new copper smelting and refining capacity to be able to make a whole range of value-added products. At the same time, Vedanta in spite of many setbacks in its attempts to reopen its 400,000 tonne Thoothukudi smelter in Tamil Nadu closed since May 2018 for environmental pollution and violent protests by local people still remains at the job of getting the court and state government nod to start smelting again.
The point is new smelting capacity in India is created based entirely on imports of copper concentrate. In fact, domestic availability of copper concentrate could support about 10 per cent production of 573,000 tonnes of copper in 2024-25. Since that production was not enough to meet the growing demand for the reddish-brown metal, the country’s reliance on imports, including scrap continued to grow. Imports were up 4 per cent to 1.2 million tonnes in fiscal 2025. The country’s demand for copper grew close to 10 per cent to 1.9 million tonnes last year, hugely exceeding domestic production. In the circumstances, the government expectedly waived2.5 per cent import duty on copper concentrate in the 2024-25 budget to give a boost to domestic metal smelting.
The foregone fact is with the commissioning of Adani’s 1 million tonne smelter at Kutch in Gujarat in two phases to make it among the world’s largest single site units, capacity expansion by Hindalco and Vedanta perennially on the prowl to seize growth opportunities will require of the country to secure supplies of copper concentrate in growing quantities. India’s demand for copper is forecast to grow to 3 to 3.3 million tonnes by 2030 and then to 8.9 to 9.8 million tonnes by 2047.
While attempts are being made to build smelting/refining capacity at home – the first phase of Adani Kutch smelter is scheduled to bring 500,000 tonnes of refined copper on stream soon – dependence on imports will stay at increasingly high levels. Besides big imports of refined copper and scrap, India’s dependence on foreign origin copper concentrate could go up to 97 per cent of requirements. The majority government owned Hindustan Copper, the country’s only miner of copper ore and owner of deposits, has been found slow in expanding the production base. In any case, India not only has limited resources of this mineral but the copper content in the ore is nothing to write home about. India’s perennial import dependence is underlined by the reality of total metal content in resources is 12.20 million tonnes in which the share of reserves is only 2.16 million tonnes.
The ground reality being this, it is no wonder that New Delhi is encouraging Adani, Hindalco and Vedanta and also PSUs to go on a search for copper resources in Peru and Chile in Latin America and the central African copper belt that includes Democratic Republic of Congo and Zambia. Australia with which India has mature trade relationship is also a target country for copper concentrate imports. The plans are to explore opportunities for assets acquisition, joint ventures with local mining groups or buy stakes in operating copper mines abroad. (IPA Service)
