As India’s demand for copper escalates, Peru stands out as a key partner, poised to play a critical role in meeting this demand. The two nations are on the brink of finalizing a significant trade agreement, promising to enhance their economic relationship and address the growing needs of India’s copper market.
A top diplomat confirmed to Financial Express Online, “To meet its growing demand, talks between the two countries regarding copper imports are expected to take place soon.”
The Rising Demand for Copper
Copper’s importance has surged as a vital component in clean energy technologies, including wind turbines and electric vehicle (EV) batteries. This has heightened the global demand for copper, a trend evident in India’s import statistics. Over recent years, India’s reliance on copper imports has intensified, driven by stagnant domestic production and a booming industrial sector. According to information in the public domain in the fiscal year 2024, India’s copper concentrate imports reached a staggering Rs 26,000 crore, doubling from around Rs 13,000 crore in FY19. This increase underscores the country’s growing dependency on external sources to fulfill its copper needs.
Peru’s Role in the Global Copper Market
Peru has solidified its position as a leading global player in the copper market. As of 2023, Peru is the world’s second-largest producer and exporter of copper, achieving a historic production of 2.75 million fine metric tons (FMT). The country’s copper production is anticipated to rise by 4% in 2024, nearing 3 million metric tons.
Peru’s top mining companies, such as Minera Las Bambas S.A., Minera Antamina S.A., and Sociedad Minera Cerro Verde S.A.A., are instrumental in this output. Notably, over 75% of Peru’s copper exports were directed towards China in 2023, with Japan and South Korea also being significant markets.
Peru’s copper mining sector has seen substantial investments, with a cumulative value exceeding USD 4.7 billion in 2023. Although this represents a 9.9% decrease from 2022, the sector remains robust, with numerous ongoing and upcoming projects. China leads the charge in mining investments, contributing 20.8% to Peru’s mining portfolio, followed by Canada, Mexico, and the United States.
India and Peru: A Growing Partnership
The growing trade relationship between India and Peru is poised for a significant leap forward. As both countries prepare to finalize a comprehensive trade agreement, their partnership is set to strengthen. This deal will likely facilitate smoother trade flows, bolster economic cooperation, and secure a stable supply of copper for India.
India’s current copper imports are diverse, encompassing copper ore, wire, and refined copper products. In 2022, India imported $2.98 billion worth of copper ore, with Peru being a notable supplier among countries like Indonesia, Chile, and Australia. India’s primary suppliers include China, France and Thailand, for refined copper products.
Peru’s Strategic Investments and Infrastructure
Peru’s strategic investments in mining and infrastructure underscore its commitment to becoming a central hub for global trade. The upcoming inauguration of the Chancay mega port, scheduled for November, marks a significant milestone in Peru’s infrastructure development. Located just 80 km north of Lima, the Chancay port will be equipped to handle the world’s largest vessels, enhancing Peru’s logistics capabilities and connecting it more effectively with global markets.
Additionally, the “Corío” port project south of Lima will further cement Peru’s status as a crucial logistics node in Latin America. These developments are expected to stimulate economic growth and increase trade opportunities between Peru and its global partners, including India.
India and Peru: Celebrating a 60-Year Diplomatic Relationship
As India and Peru commemorate the 60th anniversary of their diplomatic relations, the trade agreement and enhanced cooperation represent a natural progression of this long standing partnership. The two nations have navigated a complex global landscape together, and their mutual interests in copper trade highlight the potential for future growth.
Peru’s attractiveness as a mining investment destination is underscored by its stable macroeconomic environment, significant foreign direct investments, and a strong performance in the mining sector. With its strategic infrastructure investments and growing production capacity, Peru is well-positioned to meet India’s increasing copper demand.