Adani, Hindalco show interest in Hindustan Copper's Jharkhand mines

Adani Enterprises and Hindalco Industries are among the seven bidders participating in the pre-bid conference conducted to find a mine developer and operator (MDO) for Hindustan Copper’s mines in Jharkhand.
 

“Adani and Hindalco attended the pre-bid conference earlier on Monday,” a source with knowledge of the matter told Business Standard. The two mines — Rakha and Chapri — have a combined capacity of 3 million metric tonnes.

MDO is a business model in the mining industry where a specialised company is contracted to develop and operate a mine on behalf of the mine owner.

This approach is often used by mining companies or state-owned enterprises to leverage the expertise, resources, and efficiency of private sector companies to extract minerals while retaining ownership of the mining assets.
 

If successful, this would be Adani Group’s foray as an MDO in the copper sector. Currently, it has MDO operations in coal and iron ore sector. This comes at a time when the conglomerate has also marked its entry into India’s metals sector with the start of operations at its first copper facility at Mundra in Gujarat. Adani Enterprises, which houses the copper business, looks to rival KM Birla-promoted Hindalco Industries, with a capacity of 0.5 million tonnes per annum (MTPA) in the first phase.
 

Hindalco is currently the only major copper producer in India, following the closure of Vedanta’s Sterlite Copper unit’s 400 kilo tonnes per annum (KT) capacity in Tamil Nadu.

Adani’s initial production capacity of 0.5 MTPA can help bridge this gap in domestic production.
 

In the December 2023 ended quarter, according to industry numbers, India’s copper production was at 133 KT, and the country imported another 64 KT.
 

In March, Adani Enterprises announced it had commissioned the first unit of its greenfield copper refinery project at Mundra by dispatching the maiden batch of cathodes to customers. The company said it is setting up a plant with one MTPA capacity in two phases, with close to $1.2 billion to be invested in the first phase. The business is named Kutch Copper and operates as a subsidiary of Adani Enterprises.
 

Apart from Adani Enterprises and Hindalco Industries, others participating in the conference included NCC, SMS Ltd, Maheshwari Mining Private Limited, R K Earth, and South West Mining.
 

Hindustan Copper plans to give both the mines to a single MDO. The Rakha copper mine has been closed for 20 years.

“We closed the Rakha mines because it became costlier to operate, and now want to give it to a developer,” the source said. This decision marks a strategic effort to revitalise copper mining operations in the region by involving private players with the capability to manage and develop the mines efficiently.
 

The interest from Adani Enterprises and Hindalco Industries, two of India’s leading industrial conglomerates, highlights the potential and attractiveness of these mines.
 

Adani Enterprises, known for its diverse portfolio in energy and infrastructure, and Hindalco Industries, a major player in the metals sector, are well-positioned to bring significant investment and expertise to the development of the Rakha and Chapri mines.
 

This development is part of Hindustan Copper's broader strategy to enhance domestic copper production and reduce dependence on imports, the source said.
 

The successful reopening and operation of these mines could play a crucial role in meeting India’s growing demand for copper, driven by infrastructure projects and the burgeoning electric vehicle market.