Adani's Kutch Copper, BHP eyeing Rs 30,000 cr copper supply deal: Report

Kutch Copper, a company controlled by Gautam Adani, is reportedly negotiating with Australian mining giant BHP to secure up to 1.6 million tonnes of copper concentrate annually, reported The Economic Times, citing sources.

 

The potential supply agreement could be worth approximately Rs 30,000 crore per year, based on current market prices, which are subject to change. Both companies are still finalising the details of the contract, according to the report. Business Standard could not independently verify these reports.

 

Copper prices trending upwards

 

According to London Metal Exchange (LME) projections, the price of copper may rise to $9,715 per tonne in the next three months and could surpass $10,000 per tonne by the end of 2025. Kutch Copper, a subsidiary of Adani Enterprises Ltd, began operations at its new copper refinery in Mundra in March this year.

 

Adani Enterprises has committed nearly $1.2 billion to establish a copper smelter with an initial capacity of 0.5 million tonnes per annum (mtpa). The second phase of the project would double this capacity, making Kutch Copper the largest single-location custom smelter in the world with 1 mtpa output.

 

Meanwhile, BHP sources copper from Chile, Australia, Argentina, and Arizona, and is the largest provider of copper concentrate to India. Indian smelters typically import copper concentrate with a copper content of around 25 per cent, the business-daily said citing experts.

 

The pricing of supply contracts is linked to London Metal Exchange rates, and additional factors such as currency hedging, freight, treatment and refining charges, and other overheads are also being negotiated between the two companies.

 

Domestic copper production

 

In India, Hindustan Copper Limited, a public sector entity, is the only domestic producer of copper ore. The country produces approximately 4.0 mtpa of copper concentrate, meeting just 4.5 per cent of its total demand.

 

According to the Union mines ministry, India’s per capita copper consumption is expected to grow from 0.6 kg to 1 kg, still lagging behind the global average of 3.2 kg per capita.