Copper Industry in India

What’s in today’s article?

• Why in the News?
• About Copper
• Applications of Copper
• How Copper is Mined?
• Where Copper is Found in India?
• Largest Exporters of Copper in the World
• Challenges to Copper Production in India
• Government Initiatives
• News Summary

Why in the News?

• The Quality Control Order (QCO) on refined copper, effective from December 1, has barred imports from Japanese suppliers, who account for 80% of India’s copper imports, as they await BIS certification.
• The downstream industry has warned the government of a potential copper supply crunch, which could last for over three months due to the certification delay.

About Copper

• Copper, known for its high conductivity, malleability, and corrosion resistance, plays a crucial role in modern industries.
• India, although not among the largest producers of copper, has a significant copper industry that contributes to various sectors of the economy.
• Physical Properties: Malleable and ductile, Resistant to corrosion
• Recyclability: Copper is 100% recyclable without any loss in quality, making it an eco-friendly metal.

Applications of Copper

• Electrical Industry: Used in wiring, motors, and transformers due to its high conductivity.
• Construction: Roofing, plumbing, and heating systems utilize copper.
• Automobile Industry: Essential for wiring, radiators, and connectors.
• Electronics: Integrated circuits and semiconductors rely heavily on copper.
• Renewable Energy: Crucial for wind turbines, solar panels, and electric vehicles.

How Copper is Mined?

• Mining Process:
  • Open-pit mining: Common for surface-level deposits.
  • Underground mining: Used for deeper deposits.
  • Leaching: A chemical process for extracting copper from ores.
• Refining: Smelting and electrolytic refining processes are used to obtain pure copper.

Where Copper is Found in India?

• Major Copper Reserves:
  • Rajasthan: Khetri and Jhunjhunu belt.
  • Madhya Pradesh: Malanjkhand mine, the largest open-pit copper mine in India.
  • Jharkhand: Singhbhum copper belt.
• Production Facilities: Hindustan Copper Limited (HCL) operates key copper mines in these regions.

Largest Exporters of Copper in the World

• Chile: The leading exporter, accounting for over 30% of global production.
• Peru: Known for its extensive copper mines.
• China: A significant exporter despite being a large consumer.

United States: Major copper reserves in Arizona and Utah.

• Australia: A consistent exporter with large mining operations.

Challenges to Copper Production in India

• Limited Reserves: India’s copper reserves are not extensive, leading to high import dependence.
• High Production Costs: Rising energy and labor costs make domestic production less competitive.
• Environmental Concerns: Mining activities lead to deforestation and pollution, triggering opposition.
• Policy and Regulatory Issues: Delays in clearances and inconsistent policies hamper growth.
• Closure of Sterlite Plant: Until 2018, India was self-sufficient in copper cathode production. The closure of Vedanta’s Sterlite plant over environmental violations severely impacted domestic supply, increasing dependency on imports.

Government Initiatives

• National Mineral Policy (NMP) 2019: Aims to promote domestic mining and reduce import dependence.
• Mining Reforms: Simplified auction processes and transparent allocation of resources.
• Renewable Energy Push: Increased demand for copper due to government incentives for electric vehicles and solar energy.
• Make in India: Encourages investment in the copper industry to strengthen domestic manufacturing.

News Summary

• India's refined copper industry faces significant challenges following the implementation of the Quality Control Order (QCO) on refined copper from December 1, 2023.
• With Japanese suppliers—India's primary source of refined copper imports—awaiting Bureau of Indian Standards (BIS) certification, concerns are mounting about an impending supply crunch that could last over three months.
• Dependence on Copper Imports:
  • India imports 30-40% of its refined copper, with Japanese suppliers accounting for 80% of imports.
  • In 2023-24, India imported refined copper worth ₹16,500 crore, primarily for the manufacture of electrical wires and cables.
• Impact of Quality Control Order:
  • QCO Requirements:
    • Refined copper producers must obtain BIS certification to export to India.
    • Certification includes a resistivity test, requiring Japanese refiners to conduct tests in BIS-approved labs in India.
    • This test is not a global standard, creating logistical challenges for Japanese refiners.
  • Supply Disruption:
    • Japanese suppliers ceased shipments in October 2023 to avoid clearance issues.
    • Stakeholders anticipate a 90-day supply gap due to the time needed for certification and shipping.
• Consequences of Supply Shortage:
  • Production Halts:
  • Downstream industries, including wire, cable, and electrical equipment manufacturers, face production disruptions.
  • The shortage could lead to higher input costs and potential project delays.
• Economic Impact:
  • Domestic industries reliant on refined copper, including medium and small enterprises, are expected to bear the brunt of the shortage.
• Stakeholder Concerns:
  • Industry Feedback:
    • Downstream user associations have requested a four-month extension for implementing the QCO.
    • Major stakeholders, including the Indian Electrical and Electronics Manufacturers’ Association (IEEMA), warned of severe disruptions.
  • Government Delays:
    • BIS certification applications from seven Japanese firms have been pending since January 2023.
    • The Mines Ministry and BIS have not provided clear timelines for resolving the certification backlog.
• Future Prospects:
  • Adani's Expansion:
    • Adani’s Kutch refinery is expected to ramp up production by 2025, potentially alleviating supply constraints.
  • Policy Interventions:
    • Export-oriented units have been exempted from QCO requirements, offering limited relief to exporters.
    • Stakeholders urge the government to expedite BIS certifications and relax QCO requirements temporarily to stabilize the market.

Q1. What is the difference between Mining and Quarrying?

Mining is the process of extracting buried material below the earth surface. Quarrying refers to extracting materials directly from the surface.

Q2. How is Iron Ore converted into Steel?

Steel can be produced from direct-reduced iron, which in turn can be produced from iron ore as it undergoes chemical reduction with hydrogen. Renewable hydrogen allows steelmaking without the use of fossil fuels.

News: Domestic industry stares at months long copper shortage as quality norms kick in