Adani’s New $1.2 Billion Copper Smelter Starved of Raw Material as Global Supply Crunch Deepens

Kutch Copper has received less than 10% of its required ore, slowing the ramp-up of India’s largest new metals project.

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Gautam Adani’s ambitious $1.2 billion copper smelter in Gujarat is struggling to secure enough ore to operate anywhere near its full capacity, highlighting how a global shortage of copper concentrate is squeezing even the world’s newest plants.

Imports Far Below Requirements

Customs data show that Kutch Copper Ltd., which started processing copper in June after repeated delays, has imported only 147,000 tons of concentrate in the 10 months through October. That is less than one-tenth of the roughly 1.6 million tons needed annually for the plant to function at its full 500,000-ton-a-year capacity.

By comparison, industry leader Hindalco Industries brought in over 1 million tons of concentrate during the same period, according to data compiled by Bloomberg.

Questions sent to the Adani Group went unanswered.

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Global Mine Disruptions Intensify the Crunch

The shortfall comes amid severe supply disruptions across major copper mines operated by Freeport-McMoRan, Hudbay Minerals, Ivanhoe Mines, and Chile’s state-owned giant Codelco. Meanwhile, China’s rapid expansion of smelting capacity has worsened the deficit, aggressively absorbing global concentrate and pushing profit margins for processors to the brink.

Treatment and refining charges — the key fees miners pay smelters — have plunged to record lows this year. The collapse signals that smelters worldwide are accepting razor-thin margins just to secure enough material.

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A Tough Start for India’s Newest Copper Player

For Kutch Copper, the supply shortage translates into:

• Higher operating costs

• A much slower-than-planned ramp-up

• Potentially unprofitable early operations

The company aims to double its capacity to 1 million tons within four years, but that expansion will depend heavily on whether global concentrate supply normalises.

“Adani’s smelter is new and should be more efficient than many competitors, so in the short term the smelter could ramp up at a loss,” said Grant Sporre, analyst at Bloomberg Intelligence. He suggested that India may eventually consider higher import tariffs to shield domestic processors — a possible trade-off of “short-term pain for longer-term gain.”

So far, shipments to the plant have come from BHP Group (around 4,700 tons), Glencore, and Hudbay, customs data show.

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Broader Implications for India’s Metals Strategy

Kutch Copper’s slow start underscores India’s broader challenge:
The country’s rapidly growing demand for copper — driven by infrastructure, power grids, renewable energy and construction — is outpacing both domestic ore production and smelting capacity.

New plants like Adani’s are central to India’s ambition to reduce reliance on imports and strengthen its position in the global metals value chain. But until global concentrate availability improves, progress may remain sluggish.