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The Global Race for Copper: Implications for India
Introduction:
The demand for copper is projected to outstrip supply by 2035, intensifying the global race for securing its sources. Countries like India, China, and the United States are focusing on securing overseas copper supplies due to domestic production limitations.
Importance of Copper in the Modern Economy
- Copper plays a key role in:
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- EV batteries and clean energy transition.
- Infrastructure and technological innovation.
- Defence applications, being the second-most utilised material by the US Department of Defence.
- Challenges in supply:
- Limited new mining projects and long lead times (~17 years) to operationalise a mine.
- Over-reliance on foreign supplies leading to geopolitical vulnerabilities.
- China dominates global copper smelting and refining with a 50% share, influencing global supply chains.
About the Copper Race between the countries: India, China and the USA
1)India’s Copper Supply Challenges and Overseas Focus
- India classifies copper as a critical mineral.
- Declining domestic production:
- 2023-24 production: 3.78 million tonnes (mt), an 8% decline from 2018-19.
- Copper concentrate import costs doubled to Rs 26,000 crore (2023-24) from 2018-19.
- Overseas copper asset acquisition:
- To meet demand, India is securing both greenfield and brownfield mining assets in Zambia, Chile, and the Democratic Republic of Congo (DRC).
- In February 2025, India secured a 9,000-sq-km copper and cobalt exploration block in Zambia.
- India’s Ministry of Mines is actively working in DRC, Tanzania, Mozambique, and Rwanda to acquire additional mineral resources.
2) China’s Copper Strategy
- China controls over 50% of the world’s copper smelting and refining capacity.
- To manage overcapacity and declining smelting margins, China has mandated that new smelters must secure long-term supply contracts.
- Lower treatment and refining charges (TCRCs) have reduced profitability for custom smelters, forcing some closures.
- China is heavily investing in DRC, Chile, and Peru to maintain its dominance in the copper supply chain.
3)The United States’ Copper Security Concerns
- Recently the White House issued a warning about over-reliance on foreign copper imports.
- President Donald Trump signed an executive order launching an investigation into copper imports and their impact on national security.
- The US has significant copper reserves, but lacks sufficient smelting and refining capacity to compete with China.
- The US is considering tariffs, export controls, and incentives to boost domestic production.
Geopolitical and Economic Implications of the Copper Race
- Global competition for copper will intensify as supply lags demand.
- China’s dominance in refining and smelting gives it leverage over global markets.
- India’s push for overseas copper assets aligns with its broader strategy for critical mineral security.
- The US is taking steps to reduce its dependence on imports and strengthen domestic processing capabilities.
- Africa will play a crucial role as a major supplier, but risks such as political instability and resource nationalism remain.
Recommendations: Strategic Measures for India to Secure Copper Supply
- Strengthening Global Partnerships: India should identify strategic suppliers such as Chile, Peru, the Democratic Republic of Congo (DRC), Zambia, and Australia to ensure a steady supply and develop long-term trade agreements for stable copper concentrate supply.
- Enhancing Domestic Exploration and Mining
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- Promote mineral exploration and incentivise private sector participation.
Africa’s Growing Role in Copper and Critical Minerals
- Africa is becoming a key player in critical minerals such as copper, lithium, and graphite.
- The Democratic Republic of Congo (DRC) is set to become the world’s second-largest copper supplier by 2030.
- Zambia, the seventh-largest copper producer globally, has attracted investments from China, Canada, and now India.
- The Vedanta Group owns a large copper mine in Zambia’s Copperbelt province.
- While African deposits are higher grade and can be developed faster, geopolitical risks remain significant.
- Strengthen the role of public sector enterprises in copper mining.
- Invest in geological surveys and modern mining technologies to improve efficiency.
- Reviewing Trade Agreements and Tariff Policies
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- Conduct a full assessment of India’s trade agreements concerning copper products.
- Consider extending countervailing duties set to expire in 2025 to protect domestic industries from unfair competition.
- Incentivising Domestic Smelting and Refining
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- Introduce capital or production-linked incentives (PLI) to attract investments in copper smelting, refining, and fabrication.
- Encourage innovation to reduce the ecological footprint of the copper industry.
- Promoting Circular Economy and Scrap Utilisation
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- Rationalise the GST structure for copper scrap to improve efficiency and formalise the scrap industry.
- Implement measures to boost copper recycling and reuse through technological advancements.
- Conduct periodic field surveys on operational reprocessing units to assess utilisation rates and efficiency.
