Adani’s copper smelter targets up to 85% utilisation by March on assured supplies

Mumbai: The Adani Group faces no significant challenges in procuring copper concentrate for its smelter operations and expects higher capacity utilisation than previously anticipated, a senior executive said. Global supplies of copper concentrate have been tight, particularly over the past two years, as smelting capacity has expanded faster than mining output. Copper mining is also geographically concentrated, with the top three producing countries accounting for nearly 50% of global output.

“As far as the procurement of raw material is concerned, we have not seen any significant challenge in terms of what we are hearing otherwise in the market, because we have some of the long-term contracts tied up to a significant part of our requirement,” said Manan Vakharia, head of finance at Adani Enterprises.

Kutch Copper, housed within Adani Enterprises as one of the group’s incubation businesses, commissioned its smelter in 2024. As one of only two major operational copper smelters in the country, it is ramping up towards its initial capacity of 500,000 tonnes.


“We have already tied up approximately 50%-60% of our requirement (of concentrate) on the long-term basis, and on a short-term basis, another 20% is already contracted,” Vakharia told analysts after the company’s quarterly earnings.

The assured supply of raw material will help the company raise capacity utilisation to 80%-85% by March, Vakharia said. In July, the company had guided that utilisation would reach 75% by the end of the fiscal year.

Kutch Copper operated at 64% utilisation in the September quarter, producing 80,200 tonnes of copper and selling 80,600 tonnes. The business reported revenue of 14,843 crore and earnings before interest, tax, depreciation and amortisation (Ebitda) of 1,283 crore during the quarter.

Effectively, the smelter made an EBITDA of Rs 2,033 crore in the first half of the fiscal; this compares to an operating loss of Rs 320 crore in the year-ago period. Kutch Copper had guided for an EBITDA of Rs 3,100 crore in the current fiscal, and has already achieved about 65% of its target for the year.

While capacity utilisation and revenue are expected to grow in the second half, EBITDA may not grow proportionately, given that the elevated prices of sulphuric acid – which are currently boosting profitability -- are likely to moderate.

Margins in the long-run are expected to be around 5%, Robbie Singh, the chief financial officer for Adani Enterprises had said in August. In the September quarter, margins were around 8.6%.