India recently acquired a 9,000 sq km copper and cobalt exploration block in
Zambia, a significant step to secure overseas mining assets amid declining
domestic production.
Meanwhile, the US has raised concerns about its reliance on foreign copper,
citing threats to national security, infrastructure, and technology.
Simultaneously, China is curbing smelting overcapacity as copper ore supply
tightens, while maintaining control over 50% of global smelting and refining
capacity.
Rising Demand for Copper
Copper demand is surging due to its crucial role in EV batteries, clean energy
technologies, and electronics. Global demand is expected to outstrip supply by
2035, prompting countries like India, China, and the US to secure supply chains
and enhance domestic production.
Copper Value Chain
Copper undergoes several stages of processing:
Concentrate Production: While recycling and alternative battery technologies can partially offset demand, primary mining remains
essential to meet future needs.
India’s Overseas Focus on Copper
Declining Domestic Production:
- Copper is a critical mineral for India’s infrastructure and energy transition.
- Domestic ore production stood at 3.78 million tonnes in 2023-24, down 8% from 2018-19 levels.
- Hindustan Copper Ltd (HCL) reported a 6% YoY production decline between April–January 2023-24.
Rising Import Dependency
- Copper concentrate imports doubled in value to ₹26,000 crore (2023-24) from 2018-19.
- Despite having large copper deposits, India’s lack of extensive exploration has hampered mining.
Overseas Expansion Strategy
To bridge the supply gap, India is acquiring copper assets in Zambia, Chile, and the DRC — regions with
high-grade deposits and mining-friendly environments. However, geopolitical risks pose challenges to these
overseas ventures.
- Global Competition for Mineral Assets
- Major Copper Players in Zambia:
- First Quantum Minerals (Canada)
India’s Ministry of Mines is working through nodal officers in the DRC, Tanzania, Mozambique, and Rwanda
to secure additional mineral assets amid fierce competition from other countries.
Trump’s Executive Order on Copper
On February 25, former US President Donald Trump initiated an investigation into copper imports, citing their
impact on national security and economic stability. The investigation aims to:
- Identify supply chain vulnerabilities
- Recommend tariffs, export controls, and incentives
- Boost domestic copper production
Despite having ample reserves, the US lags behind China in smelting and refining capacity.
China’s Efforts to Control Overcapacity
China controls over 50% of global copper smelting capacity, but faces:
- Falling Treatment and Refining Charges (TCRCs)
- Tightening ore supply
- Excess smelting capacity
- To restore market balance, China is:
- Lowering utilization rates
- Suspending or shutting down smelters
- Delaying new smelting projects
Conclusion
As the race for copper intensifies, securing long-term supply chains is becoming a strategic priority for India,
China, and the US. Africa’s growing role in copper production, combined with geopolitical challenges, will shape
the global copper market in the coming years.