Adani’s $1.2 billion copper smelter caught up in global ore shortage - The Economic Times
Adani’s recently launched $1.2 billion copper smelter in Gujarat is operating far below its capacity because of a sharp global shortage in copper concentrate. The plant, run by Kutch Copper Ltd., has imported just about 147,000 tonnes of ore in the last ten months — less than 10% of what it needs to run at full strength. The smelter needs roughly 1.6 million tonnes of concentrate annually to reach its designed capacity. The crunch is driven by mine disruptions at major global producers like Freeport-McMoRan, Ivanhoe, and Chile’s Codelco, coupled with China’s rapid expansion of its own smelting capacity. As a result, processing fees are plunging, forcing smelters to operate on thinner margins just to secure raw material. For Kutch Copper, this tight supply means higher operating costs, a slower ramp-up to full capacity, and the possibility of short-term losses, even though the plant is newer and more efficient than many rivals.
The Key points
- Adani’s smelter is running at a small fraction of its 500,000 tonnes-per-year capacity.
- In 10 months, it imported only ~147,000 tonnes of copper concentrate.
- The smelter needs about 1.6 million tonnes of concentrate annually for full operation.
- Global mine disruptions — at companies like Freeport-McMoRan, Ivanhoe, and Codelco — are tightening supply.
- China’s expansion in smelting capacity is increasing competition for limited ore.
- Treatment and refining charges (TC/RC) are at record lows, reflecting fierce competition among smelters.
- To maintain operations, Kutch Copper may have to accept tighter margins or operate at a loss temporarily.
- BHP, Glencore, and Hudbay have supplied some ore, but not enough to meet demand.
- The supply squeeze is delaying the plant’s full-scale ramp-up, even though it plans to double capacity in a few years.
- This struggle underlines India’s broader challenge of scaling up metal processing capacity amid limited domestic ore reserves.
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