Adani's Kutch Copper nears Rs 30,000 crore copper sourcing deal with BHP

Adani-controlled Kutch Copper is reportedly in talks with Australian mining giant BHP for a deal involving up to 1.6 mtpa of copper concentrate, potentially worth Rs 30,000 crore annually

Gautam Adani-controlled Kutch Copper is reportedly in discussions with Australian mining giant BHP to secure a substantial copper concentrate supply. The potential agreement could involve up to 1.6 million tonnes per annum (mtpa) of copper concentrate, according to a report by The Economic Times.

 

The deal is projected to be worth approximately Rs 30,000 crore per year based on current market rates, though the final value may fluctuate due to copper price volatility. Both companies are said to be finalising the details of the supply agreement, the report said.

Copper prices are on the rise

As of November, copper prices on the London Metal Exchange (LME) are around $9,474 per tonne. Market forecasts predict an increase, with prices expected to rise to $9,715 per tonne within the next three months and potentially surpass $10,000 per tonne by December 2025, the news report mentioned.

 

Kutch Copper, a subsidiary of Adani Enterprises Ltd, commissioned the first unit of its copper refinery project in Mundra earlier this year, further solidifying its position in the industry.

 

Adani Enterprises is investing approximately $1.2 billion to establish a copper smelter with an initial capacity of 0.5 mtpa. A second phase, set to double the capacity to 1 mtpa, is planned. Upon completion, Kutch Copper will be home to the world’s largest custom copper smelter at a single location, the report said.

BHP’s role as a leading copper supplier

BHP sources copper from key locations such as Chile, Australia, Argentina, and Arizona. It is also the largest supplier of copper concentrates to India, where domestic demand far exceeds production capacity. Indian companies typically import copper concentrate with around 25 per cent copper content, which is then processed in local smelters.

 

The pricing for copper supply deals is linked to the London Metal Exchange, with additional factors such as currency hedging, freight, treatment and refining charges, and other operational costs also influencing final negotiations.

India’s growing copper demand

In India, Hindustan Copper Limited is the only public sector company producing copper ore, contributing to a total domestic production of around 4.0 mtpa. This accounts for just 4.5 per cent of the country’s overall copper concentrate needs, highlighting a significant reliance on imports, the report said.

 

India’s per capita copper consumption is anticipated to grow from 0.6 kg to 1 kg, as per estimates from the Union mines ministry. In comparison, the global average per capita consumption stands at 3.2 kg, underscoring India’s increasing demand for copper in the years to come.