Copper Demand On Pace For 7% Growth in India.

India has become a net exporter of copper after being a net importer during the last decade, even as the country is not a major producer of copper ore, but produces the refined forms of copper.

About a decade ago, the Indian copper industry consisted of a single state-owned company and now the copper industry in India takes up about 3 percent of the entire world market for copper.

In 2011, India’s copper demand is estimated to grow by at least 7 percent – following a similar forecast in 2010 — fed by the power sector. According to India’s 11th five year plan (2007-2012), the country’s power generation sector is likely to make a huge investment with 150 power projects for the various stages of installation.

During the last few years, India’s switch from net importer to exporter is due to a rise in production by three companies: Sterlite Industries, Hindalco, and Hindustan Copper. The state-owned Hindustan Copper is a vertically integrated producer, whereas Hindalco and Sterlite Industries are mainly custom smelters. Hindalco and Sterlite industries account for more than 80 percent of India’s total copper production.

The most favorable contributing factors for the growth of the Indian copper industry include changes in global usage, industrial development in India, domestic increases in the construction, power, telecommunications and automobile sectors.

Copper is used broadly in the manufacture of electrical machinery, building, cabling for power and telecommunications, and automobiles. This metal is also used for making brass and other similar alloys. However, it is the electrical industry that consumes an appreciable bulk of the total amount of copper produced in the world.

The industry imports raw copper and exports finished products. Reports suggest that India imports copper ore from Chile, Indonesia, Australia, and Canada. Available figures also suggest that India exports around 400,000 tons of copper (which includes raw copper).

Reuters quoted Shakeel Ahmed, chairman and managing director of Hindustan, as saying that his company exports about 350,000-400,000 tons of refined copper every year. Ahmed hopes that with the new capacity addition, the exports could shoot up to 900,000 tons.

According to data published by CRU, India’s refined copper production in 2007 was 710,000 tons, while its consumption was 545,000 tons.

Until 1998, Hindustan Copper has been the only producer of copper concentrate in India. Since then, several smaller companies, including Sikkim Mining Corporation at Rangpo and Hutti Gold Mines in Karnataka have been producing concentrates. Hindustan Copper will now be largely relying on its Malanjkhand mines at Madhya Pradesh.

Of the total production of copper ore in India, Karnataka, Rajasthan, Bihar and Madhya Pradesh states account for a major output.

Copper mining is constrained by the lack of good quality ore and average metal content in Indian ore is 1 percent against the world average of 1.5 percent. The maximum share of copper production in the world is constituted by Chile and United States, which contribute 18 percent each; Canada, Russia and Zambia follow close behind. Total world resources of copper are estimated to be around 2.3 billion tons.

Source : agmetalminer.com