Going green is a laudable initiative. But the road ahead for electric vehicles isn’t going to be smooth considering the challenge in copper production. From being an exporter till 2018, India has been pushed to become a net importer of copper now.
India has set a target for Electric Vehicle (EV) penetration; 30 per cent private cars, 70 per cent commercial cars, 40 per cent buses and 80 per cent two and three-wheelers by 2030. This would amount to having eight crore electric vehicles on the road by 2030.
Going green is a laudable initiative. But the road ahead for EVs isn’t going to be smooth considering the challenge in copper production. From being an exporter till 2018, India has been pushed to become a net importer of copper now. This is due to the closure of Sterlite Copper’s plant at Thoothukudi. It catered to around 40 per cent of the domestic demand. Locals, social and environmental activists alleged that the facility was causing health hazards and also environmental damage. The Tamil Nadu Pollution Control Board, took the extreme position of ordering the shutdown of the plant. Even as the issue is caught in a politico-legal tangle, Sterlite announced its intention to sell the Thoothukudi plant.
4 times more copper!
The Sterlite plant closure has put the copper using industries in a huge spot. A study by the International Copper Association (ICA) has highlighted that EV vehicles would need more copper than traditional vehicles. The report estimates that a vehicle with internal combustion engine uses 23 kg of copper, the hybrid electric vehicle consumes 40 kg and the battery electric vehicle needs about 83 kg of copper.
“Copper is going to be the key resource that will lead the transformation of India into a carbon-neutral country. The copper intensity of EVs is 4 times as much as traditional vehicles. With India currently being a net importer of copper, it could potentially face a shortage or fail to achieve the 30 per cent EV vision by 2030. To produce renewable energy of 500 GW, India would require investment in solar and wind power and its copper intensity is two times higher, compared to coal and hydel. The bottom line is clear. We will require more copper and native copper manufacture would be key,” said Mayur Karmarkar, Director, International Copper Association.
Anirudh Narayanan, CEO and Co-Founder of Coimbatore-based Boom Motors said, “I do believe it will be important for India to develop local copper reserves more aggressively to support both EV and renewable transition and also to support growth of local electrical and electronic manufacturing.”
From exporter to importer
The country’s present installed capacity is sufficient to cater to the annual domestic copper demand of 1 million metric tonnes. Despite having sufficient capacity, refined copper imports at the end of 2020 was 0.35 million metric tonnes. After 18 years, for the first time in 2018, India became a net importer of copper. This was mainly due to the closure of Sterlite plant in 2018.
Copper prices have also increased to $ 10,000 in 2022 from its average price of $ 6,023 in 2018. This also highlights the immediate need to commence domestic supply. In financial terms, refined copper imports led to a forex outflow of $ 1.9 billion in FY 20.
Ensuring domestic self-sufficiency in refined copper production is paramount for India to be in line with its clean energy transition.
