Surge in Copper Demand Anticipated in India
India is poised for a significant increase in copper demand, projected to rise by approximately 7% in the coming years. This surge is driven by the expanding renewable energy sector and ongoing infrastructure projects, according to industry experts. Key initiatives, including the “Housing for All” program and national highway development, are fueling this growth, as highlighted by PHDCCI President Hemant Jain.
Factors Driving Demand
The rising demand for copper in India is closely linked to various government policy initiatives. Jain noted that the construction of industrial corridors and energy transition efforts are pivotal in this context. The Production-Linked Incentive (PLI) scheme and the Atmanirbhar Bharat initiative are expected to attract private investments into the copper sector. Currently, India produces around 555,000 tonnes of refined copper annually, while domestic consumption exceeds 750,000 tonnes, leading to an annual import of approximately 500,000 tonnes to meet the shortfall.
Experts predict that copper demand could potentially double by 2030, which would significantly widen the existing demand-supply gap. This increase is largely attributed to the transition from fossil fuels to renewable energy sources, which requires substantial amounts of copper for manufacturing electric vehicles (EVs), solar panels, wind turbines, and EV batteries.
Investment Trends in Copper Production
In response to the escalating demand, major domestic conglomerates such as JSW Group, Aditya Birla Group, and Adani Group are committing substantial investments in copper production facilities. These investments aim to enhance local output and reduce reliance on imports. Former steel secretary Aruna Sharma emphasized the critical role of copper in India’s decarbonization strategy, noting that companies are increasingly investing in this mineral to align with government policies and address the demand-supply gap. With rising copper prices, investments in production and smelting are viewed as lucrative opportunities.
Addressing the Demand-Supply Gap
Industry experts have called on the government to leverage the potential of local copper plants that remain underutilized. The closure of Vedanta’s Sterlite plant in Tuticorin, Tamil Nadu, in 2018, resulted in a loss of over 46% of the country’s copper production capacity, transforming India into a net importer of refined copper. Between 2013-14 and 2017-18, India experienced a compound annual growth rate (CAGR) of 9.6% in domestic refined copper production, even achieving net exporter status during that period.
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