India will encourage foreign copper companies to build smelters and refineries in India

On July 4 (Friday), India unveiled several measures to boost copper production on Friday, including encouraging foreign companies to build smelters and refineries in India in exchange for the country's state-owned enterprises investing in their overseas mining operations.

As the world's second-largest importer of copper cathode, India's copper concentrates imports are expected to account for 91%-97% of its total by 2047, making the acquisition of overseas assets necessary.

According to government documents, although there are an estimated 12.2 million mt of copper resources, only 18% are classified as reserves, underscoring the limited availability of domestic supply in the country.

The government documents state that the increasing demand for concentrates imports highlights the need for diversifying supply sources and the necessity of mergers and acquisitions of foreign assets. The documents add that this underscores the urgent need for strategic interventions to support the industry.

The documents confirm that India plans to promote investments from foreign companies, including Codelco and Australian miner BHP.

Indian government documents show that India will prioritize the establishment of a dedicated copper chapter in free trade agreement negotiations with Chile and Peru, and seek a fixed quantity of copper concentrates supply.

"The tightening of copper supply from major exporting countries such as Indonesia and Panama has reduced India's import options. Countries like Chile and Peru have long-term fulfillment relationships with global buyers such as Japan and China," the documents state.

In the fiscal year ending March 2025, India imported 1.2 million mt of copper, up 4% YoY. India's copper demand is expected to reach 3-3.3 million mt by 2030 and increase to 8.9-9.8 million mt by 2047.

India's short-term focus includes providing financial support for the construction of scrap metal processing facilities.

The documents state that in the long run, India needs to prioritize financial support for the construction of facilities with 4-5 MMTPA (million metric tons per annum) smelting and refining capacity.

India should promote the duty-free import of high-capacity mining and beneficiation equipment.

Additionally, government documents show that the country plans to boost aluminum production. The documents state that India's domestic aluminum demand is expected to reach 8.5 million mt by FY2030.

(Wenhua Comprehensive)