Adani’s new copper smelter in Gujarat is unable to run at full strength because there isn’t enough copper ore available in the global market.
The Kutch Copper plant can produce 500,000 tonnes of copper a year, but to do that, it needs about 1.6 million tonnes of copper concentrate. Since starting operations, the smelter has received only around 147,000 tonnes, much less than required. As a result, the plant is running at a very low capacity.
This problem isn’t unique to Adani. The world is facing a shortage of copper concentrate due to production cuts and disruptions at major mines. At the same time, smelting capacity has increased in countries like China, creating more competition for limited ore.
Because of the shortage, the fees that smelters charge miners which is the treatment and refining charges, have dropped to record lows, making operations less profitable.
Some suppliers like BHP, Glencore, and Hudbay have sent ore to the Kutch plant, but the volumes are still too small to support full production.
India’s demand for copper is rising quickly for construction, power, and renewable energy. But since the country has limited copper ore reserves, local smelters depend heavily on imports, making them vulnerable to global shortages like this one.
For now, Adani’s smelter will take longer to ramp up, and may operate at a loss until global ore supply improves.
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