JSW secures Hindustan Copper mines in Jharkhand in strategic move into non-ferrous metals

The company has won a bid to secure two copper mines in Jharkhand from state-owned Hindustan Copper, two people with direct knowledge of the matter said on condition of anonymity.

The company won the bid against Hindalco Industries with a competitive revenue-sharing offer, the people cited above said. Under the agreement, JSW will develop the mines, handle capital expenditure, and manage operations. In turn, Hindustan Copper will provide technical support and receive a percentage of the revenue generated from the mines. 

“The idea is to venture into non-ferrous metals because copper will be in huge demand, be it from EVs (electric vehicles), the renewable grid, construction, home appliances, everything needs copper," one of the people cited above said. “Today, India is a net importer. This is a critical start."

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This person added that having captive copper production will also aid JSW create backward integration with its EV and battery manufacturing plans, where copper is a major raw material, “so the move is highly synergistic".

Until its own copper smelter is operational, JSW plans to sell ore in the open market for both domestic buyers and exports.

The newly acquired mines will be managed by SouthWest Mining, a JSW subsidiary that operates multiple mining projects.

According to the people cited above, the two mines are pre-MPPA (mining plan and project approval) mines and will take two or more years to operationalize. 

A pre-MPPA mine refers to a mining project that is in the exploration or development phase. The MPPA is a regulatory requirement, usually granted by government authorities, which outlines how the mine will be developed and operated in compliance with environmental, safety, and other legal norms.

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Earlier this month, JSW Steel’s joint managing director and CEO Jayant Acharya had told Mint that the JSW Group, which has the largest steelmaking capacity in India, is exploring entry into making other metals, including copper and aluminium.

The growing trend of electrification has increased the demand prospects for several metals, including copper and aluminium, making a case for the conglomerate to look at avenues for diversification, Acharya had said.

An email sent to JSW remained unanswered till press time.

Smelter plans in progress

The copper ore extracted from these mines, with a combined capacity of 3 million tonnes per annum (MTPA), will eventually feed JSW’s own smelter.

However, discussions about the location and timeline for the smelter are ongoing. “When and where the smelter comes up right now is a discussion still in the works," one of the persons cited above said.

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With India heavily reliant on imported copper to meet its industrial needs, JSW’s move could reduce the country’s dependence while boosting its export potential.

High potential

“Having captive copper production derisks companies from global price volatility and ensures a steady supply for their own consumption," said Vinayak Vipul, partner - energy practice at EY-Parthenon. “Copper’s applications are vast, spanning telecom, healthcare, and other high-growth sectors, and its longer life and superior performance make it indispensable."

Vipul added that the sector is posed for significant growth given the advancements in copper mining and processing technologies, and the government’s increased support for non-ferrous metals due to their greener profile. “Unlike steel, copper processing relies on electricity-operated smelters, aligning well with India’s sustainability goals," Vipul said. 

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“The key element of this business is securing raw material, for which there is ample demand in domestic and export markets," the first person quoted earlier said.

By ensuring a steady supply of raw materials and planning for an integrated smelting operation, the company is positioning itself to capitalize on the global copper market’s growth.