India’s Copper Mining Expansion

Recently, India secured a 9,000 sq. km copper and cobalt exploration block in Zambia, a country known for its high-grade copper deposits. This is crucial as domestic copper ore production is declining, and India aims to secure overseas mineral assets to meet rising demand. The move comes as the U.S. and China take steps to secure their own copper supply chains, highlighting the growing global competition for copper resources.

Why is Copper Important?

• Copper is a critical mineral, vital for electric vehicles (EVs), clean energy technologies, infrastructure, and defense applications.
• Global copper demand is projected to exceed supply by 2035, making it essential for countries to secure stable supply chains.
• The copper value chain involves several stages:
  • Ore extraction
  • Processing into concentrate
  • Smelting into anode
  • Refining into cathode, which is used in wires, rods, and industrial components.
• Why Zambia?
  • Zambia is the 7th largest copper producer globally.
  • The Northwestern province, where India secured the 9,000 sq. km block, is known for rich copper and cobalt deposits.
  • India’s Geological Survey of India (GSI) will explore the block, roughly six times the size of Delhi.
  • Other major players in Zambia:
    • Vedanta Group (India): Owns a large copper mine in Zambia’s Copperbelt province.
    • First Quantum Minerals (Canada) and Nonferrous Metal Mining (China): Among Zambia’s largest copper producers.

India’s Copper Mining Challenges

• Declining Domestic Production:
  • 2023-24 copper ore production: 78 million tonnes (mt) (8% lower than 2018-19). Hindustan Copper Ltd (HCL), India’s only domestic copper miner, saw a 6% year-on-year decline in output.
• Rising Copper Imports: India’s copper concentrate imports doubled in value to ?26,000 crore in 2023-24 (compared to 2018-19).
• Long Mining Timeline: Setting up a new copper mine takes up to 17 years globally, delaying immediate relief from domestic resources.
• Need for Overseas Exploration: India is looking at Zambia, Chile, and the Democratic Republic of Congo (DRC) for acquiring copper mines.
  • Mines in these countries are high-grade and can be developed faster due to their established mining infrastructure.

Global Copper Competition

• U.S. Response to Copper Shortages: Despite large reserves, the U.S. lacks refining capacity, making it dependent on imports.
• China’s Copper Strategy
  • China controls 50% of the world’s copper smelting and refining capacity.
  • China is limiting new smelting capacity due to:
    • Falling treatment and refining charges (TCRCs), reducing profitability.
    • Insufficient supply of copper concentrate from mines in Chile, Peru, and the DRC.
    • Excess smelting capacity, forcing China to slow expansion.
• China’s strategy: Any new smelters must secure long-term copper contracts before approval. China aims to balance smelting capacity with global copper ore availability.
• Africa’s Growing Role in Copper Mining
  • Africa’s share in global critical minerals (copper, lithium, cobalt) is increasing.
  • Key statistics:
    • DRC produces 70% of the world’s cobalt.
    • DRC will be the world’s 2nd largest copper producer by 2030.
    • Africa accounts for 16% of global copper production.
    • India’s Ministry of Mines is expanding its presence in DRC, Tanzania, Mozambique, and Rwanda to secure more mineral assets.
  • Challenges:
    • Strong competition from China, the U.S., and other nations.
    • Geopolitical risks and regulatory challenges in African nations.