Copper

Copper, one of the first metals known to humans and historical evidence suggest that copper was mined in the Tigris-Euphrates
valley as long ago as the 5th Century B.C. The use of copper in ancient times was more extensive than any other metal
particularly for tools, implements and weapons. The symbol for copper is Cu and comes from the Latin cuprum.

Copper is a soft and pliable in its pure form and its mixed with a number of other metals and used for various industrial as well as
domestic applications. It is a good conductor of heat and electricity. Copper is a slow corrosive metal. It doesn't react with water
but reacts to atmospheric oxygen and forms a layer on the surface. Hence, the corrosion is restricted to the top layer and doesn't
spread extensively as in the case of iron.

Economic Importance:

Copper is widely used in industrial applications ranging from defense, space programme, railways, power cables, mint,
telecommunication cables, etc. In addition, copper is essential element for all living organisms in traces as a dietary mineral.
Copper compounds are also used in fungicides and wood preservatives.

Products: cathodes, wire rods, billets, ingots, tube, sheet, plate, strip, castings, powder and other shapes. Alloy semis for
downstream industries such as automobiles, appliances, electronics etc,

Mineral Sources:

Although copper can be found free in nature the most important sources are the minerals cuprite, azurite, malachite,
chalcopyrite, chalcocite and bornite. These ores contain about 0.5 to 2% of copper. Approximately 80% of the world's primary
copper originates in sulfide ores and the rest is in the form of silicates, sulfates, carbonates and oxides.

Production: The ores are extracted by either traditional mining or by leaching. Copper is manufactured in three steps.

Concentration of the ore

conversion of sulfides and other copper compounds to copper

purification of copper by electrolysis

Primary production of copper accounts for about 70% and the rest of the 30% come from recycling of secondary sources and
scrap materials. Secondary sources of copper are alloys with high copper content.

World Scenario

World copper reserves reported to have assessed at 680 million tons in terms of copper content within them. Chile has the
largest share of about 27.94% of world reserves, followed by Australia with 12.65%, Peru with 11.18%, USA with 5.73%, Mexico
with 5.59%, China and Russia with 4.41% share each as reported by the Indian Bureau of Mines.

Mine production of copper largely remained stable at around 16 million tons during 2009 to 2011 as per the latest estimates of
the US Geological Survey (USGS). On the other hand, world refined copper production is increasing but at a slow pace of 2-3% per
annum between 2007 and 2013. According to the estimates of International Copper Study Group, refined copper output stood at
20.1 million tons in 2012 and is expected to move up to 21 million tons in 2013.
Among various countries produced, Chile occupies the first place in case of mine production accounting for about 33% whereas
China occupies the first place with about 27% in terms of refined copper production.

Use of refined copper is estimated at about 21.3 million tons as per the latest data available with the ICSG. The recent world
trends in suggest that the use and production of refined copper are moving rather close.

Use of copper is the highest in Asian countries particularly in China. Europe accounts for about 20% followed by Americas with
16% of total use of copper in the world. Electricity industry is the largest using industry of copper in the world followed by
construction and transport industries.

Domestic Scenario
Copper production in India is not enough to meet domestic consumption requirements and is supplemented with imports to a
large extent. India is the 7th largest producer of refined copper although it lags much behind in terms of mine production. Copper
mine production in India is primarily concentrated in Madhya Pradesh, Rajasthan and Jharkhand states.

Primary copper is produced manly by three companies - Hindustan Copper Ltd (HCL), Sterlite Industries (India) Ltd and Hindalco
Industries Ltd. HCL is the public sector company and it produces primary and refined copper using both indigenous and imported
concentrates as well as scrap. Whereas Hindalco and Sterlite industries are private sector companies mostly rely on imported
concentrates. Apart from these, Jhagadia Copper Ltd also produces copper but only from the secondary process.

Hindalco Copper Ltd has the largest annual capacity of 5 lakh tons of copper smelters followed Sterlite industries by with 4 lakh
tons of copper smelters, HCL with 51.5 thousand tons and Jhagadia with 50 thousand tons.

Recycling of copper is increasing all over the world and a similar pattern is noted in India. However, the scrap market in India is
highly unorganized and difficult to keep a track.

Per capita consumption of copper in India is much lower at 0.5 kg per annum than 3.3kg per annum in Russia, 5.4 kg per annum
in China and about 9-10 kg per annum in developed countries.

Major industrial sectors using copper in India are electrical & telecom with 56% share followed by transport with 8%, construction
with 7%, consumer durables with 7% and engineering goods with 6% share in the total use.

Major Markets

Spot markets: Mumbai, Delhi

Futures markets:
International: LME, Comex, SHFE
Domestic: MCX, NDEX, ACE, NMCE and ICEX.
 External Trade

India's external trade in copper is in a number of forms ranging from copper ore and concentrates to refined copper, copper &
alloys, brass & bronzes, scrap, cement, copper, mattes, blister, bars, rods plates, etc.

Major export destinations: Liberia for ores & concentrates and China for refined copper

Major import sources: Ores & concentrates from Chile, Australia, Indonesia and Brazil.
Refined copper from Bhutan, Zambia, Ukraine and Chile.

Factors Influencing Prices

Largely governed by the international markets and their price trends

Growth and performance of major utilizing industries
Government policies on trade both direct (restrictions) and indirect (taxes).

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