Vedanta Signs $2 Billion Deal with Saudi Arabia for Major Copper Projects
Vedanta Copper International, a subsidiary of Vedanta Limited, has signed a significant $2 billion agreement with Saudi Arabia to develop major copper projects. As part of the deal, Vedanta will establish a copper smelter and refinery in Saudi Arabia, with a production capacity of 100,000 tonnes per year. In addition, the company will set up a copper rod facility capable of producing 300,000 tonnes annually.
The new facilities are intended to address Saudi Arabia's reliance on imported copper, which currently meets the majority of the country's domestic demand, estimated at 365,000 tonnes per year. The copper smelter will process raw ore into refined copper, while the rod facility will produce copper rods for use in cables and various industrial applications.
This investment represents a shift in Vedanta's strategic focus, moving from India to the Middle East. Vedanta was previously a major player in India's copper industry through its Sterlite Copper plant in Tuticorin, Tamil Nadu, which supplied nearly half of the country's copper needs. However, environmental and legal challenges led to the closure of the facility, resulting in India transitioning from a net copper exporter to a net importer.
The closure of the Sterlite Copper plant has had a significant impact on India's copper trade. In fiscal year 2018, India exported 180,000 tonnes of copper. However, following the plant's closure, copper imports surged to 283,000 tonnes in fiscal 2019. By 2023, India’s copper exports had plummeted to just 61,000 tonnes, while imports remained stable at 275,000 tonnes. This shift has adversely affected the Indian copper industry and the associated job market.
Vedanta's move to invest in Saudi Arabia is aimed at reducing the region's dependency on imported copper and aligning with Saudi Arabia's broader economic diversification goals. The new copper production facilities will play a crucial role in meeting local demand and supporting the country's industrial growth.
