Thursday, April 04, 2024

Copper as a Critical Mineral for India

 Copper could be considered a critical mineral for India for several reasons:

1.   Economic Importance: Copper is a vital component of the global economy and is widely used in various industries, including construction, electrical and electronics, transportation, and telecommunications. In India, the demand for copper is driven by infrastructure development, urbanization, and industrialization.

2.  Infrastructure Development: As India continues to invest in infrastructure development, the demand for copper in construction, power generation, and transportation sectors increases. Copper is essential for electrical wiring, plumbing, and various building components.

3.  Electrical and Electronics Industry: The growth of the electrical and electronics industry is a major driver of copper demand. Copper is a key material for electrical wiring, transformers, motors, and other electronic components. With the increasing use of electronic devices and renewable energy technologies, the demand for copper is expected to rise.

4.    Power Generation and Transmission: Copper is crucial for the power sector, especially in power generation, transmission, and distribution. It is widely used in power cables, transformers, and other electrical equipment. As India focuses on expanding its power infrastructure, the demand for copper is likely to grow.

5.   Automotive Industry: Copper is used in various components of automobiles, including wiring, radiators, and connectors. With the growth of the automotive sector in India, driven by increasing urbanization and disposable income, the demand for copper in this industry is expected to rise.

6.    Renewable Energy: Copper is a key material in renewable energy technologies such as solar panels, wind turbines, and electric vehicles. As India seeks to increase its renewable energy capacity, the demand for copper in these technologies will likely escalate.

7.    Supply Chain Security: Ensuring a stable and secure supply of copper is essential for India's industrial growth. Dependence on imports without a reliable domestic source could pose challenges, making copper a critical mineral for ensuring the security of the supply chain.

8.    Global Trends: Internationally, copper is recognized as a critical mineral due to its importance in various industries and the transition to a low-carbon economy. As India aligns itself with its global sustainability goals, the demand for copper in environmentally friendly technologies will likely increase.

Ensuring a steady and secure supply of copper is crucial for India's economic growth, industrial development, and the achievement of its sustainability and energy goals.

Copper and lndia

Hindustan Copper Limited (HCL) was the sole producer of refined copper until 1995 and the focus was on vertical integration so that the entire quantity of ore produced in its mines was converted into copper cathode and ultimately, wire rod. After liberalization of the economy, the copper segment of industry has transformed significantly. Currently, three major players dominate the Indian copper industry. Hindustan Copper Limited (HCL) in the Public Sector, M/s Hindalco Industries Ltd and M/s Vedanta in the private sector, having current total installed refined copper capacity in the country 10.28 lakh tonnes. The capacity wise details are furnished below: -

Sl#

Company

Refined Copper Production Capacity (Tonne)

Type of Copper Producer

Location

Actual Production (Tonne)

2017-18

2018-19

2019-20

2020-21

2021-22

1

HCL

68,500

CPSE (integrated producer)

Ghatsila, Jharkhand & Jhagadia, Gujarat

25,949

16,215

5,340

Nil

620.7*

2

Birla

5,00,000

Private (Port based custom smelter)

Dahej, Gujarat

4,13,806

3,47,000

3,25,568

2,62,203

3,58,890

3

Sterlite

4,60,000

Private (Port based custom smelter)

Tuticorin, Tamilnadu & Silvasa, Daman and Diu

4,03,206

90,000

77,490

1,01,435

1,25,104

Total

10,28,500

 

 

8,42,961

4,53,215

4,08,398

3,63,638

484615

Source: Ministry of Mines, Government of India website

HCL is the only vertically integrated copper producer in the country, while M/s Hindalco (plant at Dahej in Gujarat) and M/s Sterlite Industries (plant at Tuticorin in Tamil Nadu which is closed since May 2018) have setup port-based custom smelting and refining plants. The total annual consumption of refined copper within the country is around 6.6 lakh tonnes during 2020-21.

HCL is the only producer of copper ore in the country. Copper ore production of HCL during the last few years is in the range of 4.0 million tonne per annum (Mtpa) which is equivalent to 4.5% of the country’s requirement in terms of copper metal. HCL Owns all the operating mining leases in the country, mine expansion is under way, significant mining capacity expansion to be achieved from 4.0 Mtpa to 12.2 Mtpa in Phase I by FY 2028-29 and thereafter from 12.2 Mtpa to 20.2 Mtpa in Phase II. India is not self-sufficient on Copper minerals because of its low reserve/resource base. Custom Smelters in Pvt sector, imports copper concentrate as raw material to convert it into Refined copper. Currently the refined copper produced in India meets the Country’s demand to a certain extent and the balance requirement is fulfilled by import.

Domestic level consumption

·   The total consumption of refined copper in the country in 2020 was around 6.60 lakh tonnes.

·      Electrical/Electronic Industry is by far the largest consumer of copper, where it is used in the form of cables, winding wires as it is the best non-precious metal conductor of electricity as it encounters much less resistance and is safe for electrical distribution system from high voltage transmission cables to micro-circuits.

·    Copper demand in electrical segment is growing due to demand in infra sector as a result of affordable housing schemes, rural electrification and more urbanization.

·    Copper demand in India is expected to grow due to the increased thrust of Govt. of India towards "Make in India" and "Smart City" programme, Atmanirbhar Bharat in Defense, 100 GW target for Renewable Energy by 2022, PLI schemes for Consumer electronics industry, Accelerated growth for Electric Vehicles and which will drive the demand of copper in the country.

·     Copper is essential to EV technology and its supporting infrastructure, and the increase in the electric vehicles in the market will have a substantial impact on copper demand. The projected demand for copper due to electric vehicles is expected to increase by 1.7 million tonnes by 2027.

·   The per capita copper consumption in India is expected to increase from the current level of 0.6 Kg to 1 kg in coming years. The average per capita copper consumption in the world is 3.2 kg. If India’s per capita copper consumption moves towards per capita copper consumption levels in the rest of the world, India’s copper market has the potential for significant growth.

(Source- IBM - Indian Minerals Yearbook 2019 & ICSG Factbook 2021)

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