– By Dr Vibha Dhawan
In the realm of global copper production, China has embarked on a remarkable journey of expansion and self-sufficiency. As the world intensifies its focus on electrifying transport and advancing renewable energy production, copper, a fundamental element in this transition, takes centre stage. The average battery electric vehicle requires 83 kg of copper and over 3,000 kg of copper is required for generating just one MW of power via the solar photovoltaic & onshore wind platforms. Power generation via offshore wind is even more copper intensive, requiring over 8,000 kg of copper per MW. Thrust from renewables and the automotive sector will drive demand to over two million tonnes by 2030. China, with its ambitious plans, is positioning itself as a key player, in stark contrast to the challenges faced by India, especially with the closure of the 4 lakh tonne capacity smelter plant in Tuticorin.
China’s Copper Ambitions
China, recognized as the world’s largest consumer of copper, is leaving no stone unturned to boost its copper production capabilities. In a move that belies expectations, Nanfang Nonferrous, China’s largest private copper producer, is set to double its copper smelting capacity to a staggering 700,000 metric tons per year by October 2023. This significant expansion is driven primarily by surging demand for copper in electric vehicles, renewable energy, buildings and construction activities, underlining China’s unwavering commitment to dominate the refined copper production space.
Tongling Nonferrous Metals Group Holding Co, another influential player in China’s copper landscape, is perhaps an embodiment of ambitious copper production goals. It hopes to complete three projects by 2025-end, including setting up a 500,000 tonnes per year copper facility in Anhui. It will be the world’s biggest copper smelter, with a capacity surpassing 2 million tonnes per year. These impressive endeavours underscore China’s resolve to achieve copper self-sufficiency through supply-side reforms.
A Copper Revolution in China
This expanding landscape in China tells a compelling story. A survey conducted by Fastmarkets revealed that from 2023 to 2026, twelve expansion or construction projects are scheduled for completion, signifying a net increase of at least 3.4 million tonnes per year of new copper smelting capacity. To put it in context, China, already home to half of the world’s copper cathode production capacity, produced 10.39 million tonnes of refined copper in 2022.
China’s copper expansion wave shows no signs of subsiding. With investments in copper viewed as politically and environmentally correct, it has become a strategic imperative for the nation. Interestingly, it’s not just existing copper producers who are pursuing a larger stake in the copper sector. Players from China’s real estate sector and export businesses are diversifying into the ‘green copper’ space. Xiamen C&D, in less than six months, has emerged as a major player in the copper sector. The company plans to establish a new 600,000 tonnes per year smelter in Liaoning province, following its acquisition of Xiangguang’s 450,000 tonnes per year copper facility. This vividly illustrates the copper smelting capacity explosion anticipated in China over the next four years.
India’s Challenge
While China’s copper production is booming, the size of the Indian copper industry (consumption of refined copper per annum) of around 6.6 lakh tonnes, is only 3 per cent of the world copper market, according to the Ministry of Mines.
While there are plans to increase copper production in India upto a million tonnes by 2024 in Gujarat, India’s copper production currently grapples with challenges such as outdated mining practices, low operational efficiency, and a heavy reliance on imports to meet its copper demands. However, these challenges present an opportune moment for transformation. By capitalizing on existing infrastructure and integrating modern mining technologies, India can elevate its copper production capabilities to meet the burgeoning EV needs.
There are several plans to build new copper factories in India, however, foundation for a successful copper revolution lies within India’s existing copper mines, refineries, and processing facilities. Through strategic upgrades and embracing eco-friendly and efficient mining and smelting practices, the nation can significantly augment copper production. Leveraging this established infrastructure minimizes the investment needed and accelerates the scaling of copper output.
A Tale of Contrasts
The global copper landscape is shifting, and India must adapt to secure its place in this transformative era. It’s time for India to embark on its copper journey with renewed vigor, ensuring self-reliance and sustainability in the age of Aatmnirbhar Bharat. The sharp contrast between China’s remarkable copper expansion and India’s idle copper plant at Tuticorin underscores the urgency for India to address the smelter issue. Swift resolution is essential not only for securing a domestic copper supply but also for positioning India favourably in the global energy transition. It is an opportunity to demonstrate India’s commitment to responsible resource management and sustainability, ensuring that its green energy aspirations rest on a solid foundation.
(Dr Vibha Dhawan is the Director General at The Energy and Resources Institute.)
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