Why in news?

Recently, India secured a 9,000-sq-km block in Zambia to explore copper and cobalt, crucial for overseas mining as domestic production declines.

Earlier, US had warned that overreliance on foreign copper threatens national security, defense, infrastructure, and technology.

At the same time, facing tight copper ore supply, China is restricting smelting overcapacity—new smelters must secure long-term mining contracts, mainly in DRC, Chile, and Peru. It controls 50% of global smelting and refining capacity.

What’s in today’s article?

• Rising Demand for Copper
• India’s overseas focus for copper
• Africa’s Growing Role in Critical Minerals
• Trump's Executive Order on Copper
• China’s Efforts to Control Overcapacity

Rising Demand for Copper

• Driven by EV batteries and clean energy technologies, copper demand is projected to outstrip supply by 2035.
• Countries like India, China, and the U.S. are racing to secure supply chains and boost domestic capabilities.
• Copper Value Chain
  • Copper ore undergoes multiple processing stages:
    • Concentrate production
    • Smelting into anode
    • Refining into cathode (used for industrial inputs like rods, sheets, and wires).
• Mining Remains Essential
  • Recycling and alternative battery chemistries could help, but primary mining is still crucial to meet global demand.

India’s overseas focus for copper

• India’s Declining Domestic Copper Production
  • Copper is a critical mineral for India.
  • Domestic ore production (2023-24): 3.78 million tonnes, 8% lower than in 2018-19.
  • Hindustan Copper Ltd (HCL) saw a 6% year-on-year decline in production (April–January 2023-24).
• Rising Dependence on Imports
  • Copper concentrate imports doubled in value to ₹26,000 crore (2023-24) from 2018-19.
  • India has large copper deposits, but extensive exploration is needed before mining.
• Overseas Expansion Strategy
  • India is securing greenfield and brownfield copper assets in Zambia, Chile, and the DRC to meet short-term demand.
  • These high-grade deposits and mining-friendly environments allow faster project development.
  • However, geopolitical risks pose challenges to overseas investments.

Africa’s Growing Role in Critical Minerals

• Africa’s share in copper, lithium, and natural graphite production is increasing.
• The Democratic Republic of Congo (DRC) produces 70% of global cobalt and 16% of global copper.
• The DRC is projected to become the world’s second-largest copper supplier by 2030 (IEA report).
• India’s Copper Exploration in Zambia
  • India secured a 9,000-sq-km block in Zambia’s Northwestern province through a government-to-government deal.
  • Geological Survey of India (GSI) will explore the site, which is six times the size of Delhi.
  • In Copperbelt province, Vedanta Group already owns a large copper mine.
  • Zambia ranks 7th globally in copper production (after Chile, Peru, and the DRC).
• Global Competition for Mineral Assets
  • Major copper producers in Zambia: First Quantum Minerals (Canada); Nonferrous Metal Mining (China, state-owned).
  • India’s Ministry of Mines is working through nodal officers in the DRC, Tanzania, Mozambique, and Rwanda to secure more mineral assets.
  • Competition for critical minerals remains intense as other countries also seek to expand their supply chains.

Trump's Executive Order on Copper

• February 25: President Donald Trump launched an investigation into copper imports and their impact on U.S. national security and economic stability.
• The White House fact sheet emphasized copper’s role in defense, infrastructure, clean energy, EVs, and electronics.
• The U.S. lags behind China in smelting and refining capacity, despite having ample copper reserves.
• The investigation aims to identify supply chain vulnerabilities and recommend tariffs, export controls, and incentives to boost domestic production.

China’s Efforts to Control Overcapacity

• China controls over 50% of global copper smelting but faces falling treatment and refining charges (TCRCs) and a supply-demand gap.
• Excess smelting capacity has squeezed margins, making operations less viable.
• Copper concentrate availability remains weak, forcing custom smelters to compete for limited supply.
• According to a report, overcapacity will lead to: Lower utilization rates for smelters; Potential suspensions or closures of smelting operations; Delays in new smelting projects to restore market balance.