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India Copper Forum 2018 Over the past 3 years, India Copper Forum (ICF) has strived to bring together copper industry stalwarts to discuss various opportunities and challenges for growth of copper in India. Theprevious editionsin 2015, 2016 and 2017 were held on respective themes ‘Copper Makes the World Work Better’, ‘Future with Copper’ and ‘One India One Vision’.

ICF has built strong repute across the industry and attracts active participation from the copper value chain including miners, fabricators, end-users, industry experts, government, policy makers and global thought leaders. Each year ICF carefully selects its theme to strengthen the copper community and bring together best thinkers, influencers and executors to drive copper growth.

This year’s ICF theme was ‘Copper in Technology, Innovation and Transformation’. Many sustainable development trends rely on copper for its characteristics and temperament. The criticality of copper positively impacts national and global transformation issues of air quality, electrical safety, energy efficiency, renewable energy, alternative vehicles, and climate change. The growing Indian economy with increasing disposable income, mass urbanization, formation of megacities, and infrastructural push led by the government through various plans and policies, would lead to rise in copper demand across businesses verticals. This increase in demand will push the industry to create solutions that will help improve technology and drive innovation that ultimately transforms the world around us.

ICF 2018 focused on:1.Global Asia and India overview on usage and supply of copper and emerging opportunities. 2.Advancement in copper technology and innovative production. 3.Opportunities and challenges faced by copper downstream industries.

ICF 2018 brought together who’s who of the copper industry and broader community who have shaped the industry where it stands today, and who are all geared to work together to innovate, transform and adopt the use of copper in various industries.

INDIA COPPER FORUM 2018-4

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“Copper in Technology, Innovation and Transformation”

Date: 24th October 2018, 09:30 to 17:30 hrs Venue: Shangri-La’s - Eros Hotel, New Delhi REGISTRATION: 09:30 - 10:00 HRS

INAUGURAL SESSION (10:00 - 11:30 HRS) Chief Guest Honourable Shri Suresh Prabhu,

Minister of Commerce & Industry and Civil Aviation, Government of India

Welcome Address Mr. Sanjeev Ranjan, Managing Director – International Copper Association, India

Guest of Honour and Keynote Address His Excellency Jorge Juan Castaneda Mendez, Ambassador – Embassy of the Republic of Peru Shri Anil Kumar Nayak, Joint Secretary – Ministry of Mines, Government of India Shri. V. K. Saraswat, Member, NITI Aayog, GOI,

Special Address Mr. JC Laddha, CEO – Birla Copper, Hindalco Industries Ltd. Mr. P Ramnath, CEO – Sterlite Copper, Vedanta Ltd. Mr. Shreegopal Kabra, Managing Director – R.R. Group INDUSTRY RECOGNITION (EXCELLENCE AWARDS 2018) – (11:30 - 12:00 HRS) TEA BREAK (12:00 TO 12:15HRS)

SESSION 1: COPPER SCENARIO (12:15 TO 13:30 HRS)

Panel Discussion Points: Global, Asia and India overview on usage of copper Copper usage trends in China Indian macro-economics overview Impact of FTAs on Indian manufacturing Copper pricing scenario

Session Chairman Mr. Rajeev Kher, Former Commerce Secretary and Distinguished Fellow, Research Information System for Developing Countries (RIS) Delhi

Panelists: Mr. S. Chadha Additional Secretary, Ministry of Commerce & Industry,Government of India

Mr. Rahul Prithiani Director, CRISIL Research Mr. Colin Bennett Global Manager Market Analysis, International CopperAssociation

Prof. Rakesh Mohan Joshi Professor and Chairperson, Indian Institute of Foreign Trade

Mr. Joe Zhou Project Manager Market Analysis, International Copper Association China

Mr. Kunal Shah Head of Commodities Research, Nirmal Bang Commodities

AGENDA PANEL DISCUSSION

SESSION 1: COPPER SCENARIO (12:15 TO 13:30 HRS)

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SESSION 2: GLOBAL COMPETITION AND INDIAN COPPER INDUSTRY (14:40 TO 16:15 HRS)

SESSION 3: TECHNOLOGY, INNOVATION AND TRANSFORMATION (16:15 TO 17:30 HRS)

Panel Discussion Points: Overview on copper rod market in India Overview of wire and cable industry of India Role of secondary copper in the industry Opportunities and challenges related to copper winding wire industry in India Opportunities and challenges in copper rolled products Risk management in copper procurement

Session Chairman Mr. Mayur Karmarkar, Director, Sustainable Electrical Energy - Asia, International Copper Association

Panelists: Dr. V.S. Seshadri Senior Advisor, International Policy & Trade Mr. Kaushik Vakil Vice President, Hindalco Industries Ltd. Mr. Sandeep T. Jain, Senior Vice President, Bombay Metal Exchange Ltd. Mr. Deepak Manchanda Senior General Manager, KEI Industries Ltd. Mr. Vimal Jalan Managing Director, Slimlites Electricals Pvt. Ltd. Mr. Rishit Koradia Senior Executive, Multi Commodity Exchange of India Ltd.

Panel Discussion Points: Emerging trends in charging infrastructure for electric vehicles in India Technological development for batteries in electric vehicles Use of copper alloy fish cages for aquaculture in Asia Copper heat exchangers coil in heat pump Copper: Looking beyond prices.

Session Chairman Dr. Sajid Mubashir, Scientist “G” & Member R& D at National Automotive Board (NAB), Dept of Heavy Industry (DH) Department of Science & Technology –Government of India

Panelists: Mr. Wenson Zheng Senior Marketing Director, ICA China Dr. K Balasubramanian Director, Non-ferrous Materials Technology Development Centre, (NFTDC) Hyderabad Dr. Prabhjot Kaur CEO, Center for Battery Engineering (CEEV) IIT Madras Mr. Cooper Zhao Project Manager, High Efficient Heating, ICA China Mr. Sandeep Daga Founder & Director – Regsus Consulting Pvt Ltd.

PANEL DISCUSSION PANEL DISCUSSION

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The following summary is prepared on the deliberations held at India Copper Forum (ICF) 2018, by three panel sessions.

INAUGRAL SESSION

The India Copper Forum (ICF) began with the lighting of lamp by dignitaries. Mr. Sanjeev Ranjan, Managing Director –International Copper Association, India welcomed the gathering and shared his views on the copper industry and how he hopes that copper will help in development and transformation of our country. He shared that “ICF provides a common, non-commercial platform to exchange views on how best to collaborate to take the copper industry ahead. The platform engages with Regulators and Policy Makers, Businesses and Supply Chains and End Users to create awareness and shed light on where the next big demand of copper will come from”. He stressed that support of the government is essential to provide a level playing field and to push this vision forward.

Mr. P. Ramnath, CEO - Sterlite Copper, Vedanta Ltd. was the next speaker on the occasion highlighting the power of copper. He said, “Copper is not only a mined metal but is much more than that. For example, 1 ton of copper can bring functionality to 40 cars, powers 60 thousand mobile phones, enables operations in 400 computers and distributes electricity to 30 homes”. He further added ‘In future copper is expected to hold a very important role with Electric vehicle that uses more 4-5% Copper compared to ICE vehicles”. He pledged the Govt. to support to all local manufacturers under make in India campaign. He concluded by urging the govt. and all the industry stakeholders to take a collaborative effort towards growth of copper industry.

Hon’ble Minister of Commerce & Industry and Civil Aviation, Shri. Suresh Prabhu addressed the gathering with a video message stating that “Copper is a very important element and we have very good smelters in India. Copper is biggest driver for growth of industries. India should focus on copper related issue and encourage copper manufacturing in India. It will ensure that India will not only be a importer but exporter of finished copper”.

The next key note address was delivered by His Excellency Jorge Juan Castaneda Mendez, Ambassador, Embassy of the Republic of Peru. He said “Peru stands 3rd in Copper Reserves in World. It is a Polymetallic Mining Territory from which only 20% has been explored, of which only 6% is currently being utilized”. He informed that “Indian import of copper 1,44,013 tonnes worth 2,32,46,802 INR in 2016-17”. He mentioned that “It’s time for India to invest in Peru’s copper because of growing copper demand in India and increasing global investment advantage of China over India in mining particularly in copper which also applies to Peru”. He concluded with urging the Indian copper fraternity to open new the relationship with Peru for copper mining to have a long-lasting secure supplier.

Mr. J.C. Laddha, CEO (copper) - Hindalco Industries Ltd. shared his views on economic scenario of India, the size of the copper industry and its challenges and how the industry can work with the government to solve those challenges. He mentioned that ‘Vibrant democracy, working age population, advantage of low cost labor and middle-class population are the key parameters to measure opportunities for the growth of copper industry’. He mentioned that ‘All the economic indicators of India are promising and leads to the growth of copper industry’. He gave an ov erview of the Indian copper Industry and stressed that ‘India imports ~94% of the raw material from far distance like Chile, Indonesia, Peru and is a major challenge for India copper industry in addition to the FTA’. He concluded by stressing the point ‘Key policy interventions, if undertaken will enable the copper sector to play a critical role and contribute effectively to India’s economic development’.

The next speaker Mr. Anil Kumar Nayak, Joint Secretary – Ministry of Mines, Government of India said that ‘India is a country with million opportunities and there is lot of excitement of these opportunities among global players’. He mentioned that “Govt. initiatives like Make in India, 100 smart cities, upgradation of the transport sector focused on EV’s and high-speed trains and many other are the growth trajectories for India and also the growth drivers for copper industry”. Though we are better placed with Cu production in the country, but we must have our Cu fundamental clear for growth of Cu sector.

He mentioned that the main constraint for the Indian copper industry is ~95% of refined copper demand is met by imports and future cannot be based on such high export dependency. He further said that we have to optimize Cu mining in the country and look for untapped Cu mining in the country. He informed on this that “Govt of India, Ministry of Mines has taken important steps in exploration and increasing the production through Provision of National Mineral Exploration Trust (NMET) and Provision of Composite License”. He concluded that copper stakeholders are different but with the growing Cu demand there will be a win-win situation for all. He urged the copper industry to do their bit for growth of India.

SPEAKER NOTES SPEAKER NOTES

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Mr. Shreegopal Kabra, Managing Director, R R Group, congratulated ICF for making an impact in reducing GST on Cu from 28% to 18% and urged that now ICF must focus on FTA. He mentioned that “We Indians need to focus on quality, as we observe that electrical products of India are of poor quality compared to global products. We should avoid the perception ‘if we sell cheap we sell more’ and move towards better quality”. He added by saying “We should not fight a price war, but a quality war and the way forward is via Investment in R&D and Technology”. He opined that Primary Producers and Benefactors should come together and work for the One Nation Policy. The demand of copper is going to increase; however, China’s growth is the biggest challenge to the industry, not FTA. The first panel discussion was on Copper Scenario. It was moderated by Mr. Rajeev Kher, Distinguished

Fellow – Research and Information System for Developing Countries (RIS) Delhi. He mentioned that global economy is picking up in key regions especially Americas. However Chinese economy has slowed down. He stressed that the US/China trade tension is affecting all. China is positioned strongly in the global value chain and is in the frontline of many product manufacturing industries. Hence everyone involved with China for any type of trade will be affected by the U.S. trade tariffs. He mentioned “Electrical Wires, EV’s preset a huge opportunity going forward along with the challenges of quality, substitution, FTA’s and emerging scenario of trade tensions and opportunities of growth all around. The copper Industry has to find a way to navigate these challenges and opportunities”.

The first speaker Mr. Rahul Prithiani, Director- CRISIL Research spoke about the Indian and global economy with recent developments in power sector, real estate, manufacturing & marco outlook of the Indian economy. He mentioned that ‘In recent times we have seen the rise quality of growth but not in the rate of growth’. According to him, the overall policy scenario is prudent towards fiscal policies and repair and reforms of the fiscal systems are providing a stronger footing. The focus is on policy growth trends than cyclic growth. He mentioned that the private consumption along with economic growth will drive recovery and investments in India’. He said that ‘Capacity addition of Renewable Energy will boost investment in transmission and distribution and eventually lead to growth in copper demand’.

Mr. Sanjeev Ranjan took opportunity to give vote of thanks and offered concluding remarks for the inaugural session and presented token of appreciation to the dignitaries.

SESSION 1: COPPER SCENARIO

The second speaker Mr. Colin Bennett, Global Manager Market Analysis - International Copper Association spoke about the role of copper in the 21st century, the use of copper in energy storage, RE, EV, smart grids that are churning to be major supporting areas for Cu. He mentioned that “Global demand changes of copper has been consistently increasing over the past few years and peaked in 2017 at 28K kilo ton. The 21st Century Energy transition to smart homes, heat pumps, and renewables is fueling this growth”. On sharing the statistics of the motors and generators industry he said, “This is a 2 Million Ton Market for Copper and is mainly fueled by demand in large industrial motors”.

SPEAKER NOTES

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The sixth panelist Mr. Kunal Shah, Head of Commodities Research, Nirmal Bang gave an overview on where the Copper price is heading. While sharing the copper pricing trends said, “The Federal Reserve unwinding its balance sheet aggressively means more volatility”. He also shared the current trends in global copper mining and its impact on supply. He further added that the growth in the demand for copper in China may be at 2% in 2019. He mentioned that ‘Auto sector and infra sectors are demand drivers for China, but things are little murkier for them going forward. It is expected the Cu demand will go down in China because of the supply side issue’. He informed that ‘Till now there is no major impact of trade war but later it may slowdown if it remains rhetoric’.

The third speaker Prof. Rakesh Mohan Joshi, Professor and Chairperson of Indian Institute of Foreign Trade (IIFT), New Delhi & Kolkata spoke about impact of FTAs on copper producers. He mentioned that the need of the hour is providing a level playing field to the copper manufacturers. He further mentioned that trade deficit for copper has grown substantially. FTA’s and inverted duties along with imports from China and other ASEAN are rising and adversely affecting the Indian Copper Manufacturers.

The session chair Mr. Rajeev Kher in his concluding remarks said that “We should note that FTA’s don’t always affect trade adversely.” He thanked all the panelists for sharing their views.

The fourth panelist Mr. Sanjay Chadha, Additional Secretary - Ministry of Commerce & Industry, Government of India gave an overview on commercial aspect of Copper. He highlighted there has been a 30% jump to 3.5 billion dollars as copper exports. China is the biggest market however Copper cathodes, which are a commodity, take 70% of that share. He said, “We need to ask ourselves if we want to make more products rather than just produce copper cathodes because the same products that use these cathodes come back to India and compete in our downstream industry”. He stressed that the opportunity for copper ahead is huge. For an example, in the EV segment, the average electric car will use 4 times the amount of copper than a normal car. He concluded with a motivational statement that “We are copper, you can twist us, you can bend us, but you cannot break us”.

The fifth panelist Mr. Joe Zhou, Project Manager Market Analysis, International Copper Association gave his remark on contributors to the growth of copper demandi n China. He said, “In China industrialization and urbanization were the key drivers for growth of Copper demand”. He also shared that 47% of the global copper produced is used in China. The largest demand for copper in China is from building and construction, infrastructure, transportation, and electronics industry. He said, “RE sector is key contributor to copper demand, followed energy efficiency in Distribution Transformer market, Room Air conditioner (RAC’s). Typically, copper usage increases 0.7% for every 1% increases in EER of heat exchangers in RACs.”

He stressed that “Lower carbon footprint drives motor design that helps in efficiency improvement and typically lower the losses in motor design means higher copper use.”

SESSION 1: COPPER SCENARIO SESSION 1: COPPER SCENARIO

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The second panel discussion was on Global Competition and Indian Copper Industry which was moderated by Mr. Mayur Karmarkar, Director. He addressed the gathering and introduced the topic of discussion. He talked about the ways to increase efficiency and productivity of the industry. He also focused on the point of increasing copper consumption of India and contribution of Indian copper industry globally.

The first speaker of this session Dr. V.S. Seshadri, Senior Advisor – International Policy & Trade spoke on upcoming trade policy and Free Trade Agreement. He mentioned that, ‘Announcement has been made that US is doing fast track interaction with UK, EU and Japan for bilateral trade. Also, US, EU and Japan have issued a joint statement talking about the proposed reforms of the WTO and tightening of the rulebook around IP and subsidies.’ He mentioned that all of these trade agreements will have its own implications and India will need to have stronger and quality imports. He mentioned that refined Cu imports have gone up significantly due to rules in FTA and change in tariff rules and duty reduction from Japan and ASEAN countries. He further added that “Inverted duty structure is the main concern of the Indian copper industry, however, on the export front we have not utilized the market access and this year it has dwindled more. We still remain predominant exporters of copper cathodes”.

We had Shri. V. K. Saraswat, Member, NITI Aayog, GOI, address the gathering though a short video talking about the copper industry in India. He said that the growth in the copper industry signifies the overall economic health of a country. He also shared, that there is a major emphasis on electric vehicles in India, which will play an important role in the country’s growth.

SESSION 2: GLOBAL COMPETITION AND INDIAN COPPER INDUSTRY

The second speaker of this session Mr. Kaushik Vakil, Vice President – Hindalco Industries Ltd focused on copper rod’s existing supply & demand and its challenges. He said, “Huge surplus of rod is putting pressure on process and quality in the domestic market”. He gave a brief about role of impurities in Copper Concentrate Rods. He said “Prime impurity source is coming from copper concentrate. Different impurities can lead to different defects like wire breakages, reduced conductivity, etc. We need to depend on new innovations to reduce impurities”. He mentioned that Hindalco is the major manufacturer in India for 19.6 mm diameter copper rod for Indian railways.

The third speaker from this session Mr. Sandeep T. Jain, Senior Vice President – Bombay Metal Exchange Ltd discussed primarily about the copper scrap. He mentioned that copper is the largest non-ferrous metals market in India in terms of production. He informed that “The market demand for copper is forecast to reach 3 million tones by 2022 in emerging markets”. He shared that copper has been extensively used in Air Conditioning and Refrigeration industry as cooling coils which is projected to expand rapidly. He also discussed the growth drivers for copper tubes especially for HVAC applications.

The fourth speaker of this session Mr. Deepak Manchanda, Senior General Manager – KEI Industries Ltd. mentioned that as a manufacturer, their role is to support and get more users converted to a model that pushes usage of copper. In the process, they will also educate consumers and designers of the benefits of copper to cater to their respective needs”. He further added that industry can be more receptive on solutions that are more suitable to them. He mentioned that “As manufacturers they are too willing support the needs of the industry and adhere to all international standards”.

Mr. Vimal Jalan, Managing Director – Slimlites Electricals Pvt. Ltd. spoke about how it’s heartening to see so much investment in one industry. He mentioned that they would like to push for zero duty on all copper products. He further said that in the current scenario, finished products that are being imported from China should be checked. He concluded by saying that “All regulators along with the government should look into the import scenario for the health of the overall domestic copper supply chain”.

The last speaker from this session Mr. Rishit Koradia, Senior Executive – Multi Commodity Exchange of India Ltd. talked in commercial perspective. He shared his views on risks and strategies, hedging and its benefits. He mentioned that “At MCX, Copper options have recorded Average daily volume of 570 lots amounting to an average of INR 25.99 crores with highest volume of 2,526 lots amounting to INR 119.48 crores as on June 19, 2018. It has an Average Open Interest of 1,565 Lots”.

The panel chair, Mr. Mayur Karmarkar gave token of appreciation to dignitaries at the end of this session.

SESSION 2: GLOBAL COMPETITION AND INDIAN COPPER INDUSTRY

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The third panel discussion was on ‘Role of Copper in Technology, Innovation & Transformation’ which was moderated by Dr. Sajid Mubashir, Scientist “G” & Member R&D at National Automotive Board (NAB), Dept of Heavy Industry (DH) Department of Science & Technology - Government of India. He introduced he need of charging infrastructure for EVs, use of alloys for fish aquaculture, copper heat exchanger coil in the heat pumps as the topic of discussion for the panels. He mentioned that govt. is promoting connected/ shared e-mobility compared to private mobility. He said that the decentralized growth will boost the growth of copper industry. He said, “We don’t have a supply chain for e-mobility and have a lot of dependency on imports starting from the batteries”.

The first panelist of this session was Mr. Sandeep Daga, Founder & Director – Regsus Consulting Pvt. Ltd. He introduced Metal Survey - India’s first online survey designed for base metals businesses. He mentioned ‘Golden period of consumption has taken a long to reach the inflection point of demand in each case’. He said, ‘India is closer to the inflection point of copper consumption’. He commented business intelligence will play a crucial role in the copper consumption story and this will need access to information.

Mr. Wenson Zheng, Senior Marketing Director – ICA China. He majorly talked about the new development in China of use of copper in aquaculture. He mentioned that China has started this new innovation in copper mesh cage. Copper mesh is used for Aquaculture as it is better for the environment, for the fish, and for the people”. He stated that “Copper’s one of the important properties is the anti-fouling. This anti fouling copper mesh is highly reliable during extreme weather compared to plastic mesh. Traditional plastic fish mesh has a serious environmental impact and low-quality output along with polluting the water”.

SESSION 3: COPPER IN TECHNOLOGY INNOVATION AND TRANSFORMATION SESSION 3: COPPER IN TECHNOLOGY INNOVATION AND TRANSFORMATION

The third speaker Mr. Cooper Zhao, Project Manager, High Efficient Heating, International Copper Association gave an overview of copper in heat pumps. He said cooling market is a big existing market in India but in heating market copper usage is much less. He mentioned that “Heat pump is an energy saving and copper intensive technology. It is 3-4% more energy efficient than electrical resistance heat pump”. He stressed that “As we are aware, heating and cooling both need heat exchangers. The cooling market already has a big demand in India but for heating market, copper usage is very low”. He informed that Chinese central and state government has declared air source heat pump as a renewable energy product.

The third panelist Dr. Prabhjot Kaur, CEO - Battery for Engineering (CEEV), IIT Madras focused on role of copper in EVs. She mentioned that “We need to do thing differently and indigenously and ACT FAST”. She mentioned that batteries dominate the cost of an EV and account for 30-40% of overall cost. Larger the battery, more the cost, lower energy efficiency. Small batteries create range anxiety. She further said, “We clearly need affordable vehicles with small batteries that last longer but with no compromise on the quality”. She suggested a solution to do things differently by separating the battery business from the vehicle business. She mentioned that ‘It is important to monitor batteries while charging while in-use to maximize life, performance and value’. She further showcased the results of the pilot at IITM in monitoring batteries.

The last panelist Dr. K Balasubramanian, Director – Non-ferrous Materials Technology Development Centre, (NFTDC) Hyderabad gave an overview about Copper and its alloys. He mentioned that slowly copper and magnet is going away from motor. He also mentioned “India alone need 400 million tonnes of copper with growth in EVs but about 10% penetration may happen. The moment this happens cost of Cu is going to go up”. He said that “Technology may drive EV designs at higher voltage and he expects market of 300,000 Tonnes of Copper to build up with increased push for E Mobility”.

Dr. Sajid Mubashir gave vote of thanks and the token of appreciation

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Copper, one of the oldest metals ever used, has played vital role in the development of civilization. Presently, Copper is an important non-ferrous base metal having wide industrial applications. It has become a major industrial metal and is Third after Iron & Aluminium in Consumption rankings. “Copper is a very important element and we have very good smelters in India. Copper is biggest driver for growth of industries. India should focus on copper related issue and encourage copper manufacturing in India. It will ensure that India will not only be an importer but exporter of finished copper” says Union Commerce Minister Suresh Prabhu while addressing the India Copper Forum 2018.

Economic Scenario: India, a young Country is rapidly moving towards urbanization ably aided by - Vibrant democracy, younger average working age, low cost labour, demographic dividend and ambitious middle-class population - key parameters to support opportunities for Industrial growth including that of copper industry. Indian Copper Industry presently is to the tune of ~Rs 50,000 to 60,000 Cr. It provides direct employment to an estimated One Hundred Thousand persons and facilitates employment to another few Hundred Thousand indirectly. It has spurred the growth of downstream industries by generating business for more than a Thousand SMEs which form the backbone of Power and other Infrastructure Industries. While Global economy is picking up in key regions especially America, Chinese economy is showing signs of slowing down. Since China is positioned strongly in the global value chain and is in the forefront of many product manufacturing industries, U.S. trade tariffs War & related tensions will naturally affect all.

Supply Scenario: India’s Copper consumption has been rapidly increasing over the years, up from 476 KT in FY13 to 642KT in FY18 i.e., by ~ 35%. India is expected to be the 6th largest Copper Market by 2020 as a result of various initiatives of Govt. of India including ‘Make in India’ India’s refined Copper production has increased from 693 KT in FY13 to 843 KT in FY18 i.e., by ~ 22% and So, India’s production of refined copper has been increasing but at a lesser rate as compared to its consumption. It is also indicated by India’s lower capacity utilization rate of 80% as against the Global average of 86% in 2016. diminishing rate.

“Quality of electrical products is another major challenge for the industry. It is time that the we

come out of the perception that “if we sell cheap we sell more” to

move towards better quality”

COPPER SCENARIO IN INDIA: TIME TO SHIFT THE GEAR FOR IT’S GROWTH

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“Capacity addition of Renewable Energy, penetration of EVs will boost investment in transmission and distribution

and eventually lead to growth in copper demand”

Demand for Copper: The use of copper in energy storage, renewable energy, electric vehicle, smart grids are churning to be major supporting areas for copper. Global demand changes of copper has been consistently increasing over the past few years and peaked in 2017 at 28,000 kilo ton. The 21st Century Energy transition to smart homes, heat pumps, and renewables is fuelling this growth. On sharing the statistics of the motors and generators industry Mr. Colin Bennett, Global Manager Market Analysis, International Copper Association said, “This is a 2 Million Ton Market for Copper and is mainly fuelled by demand in large industrial motors”. He also mentioned that lower carbon footprint drives motor design that helps in efficiency improvement and typically lower the losses in motor design means higher copper use.

Citing an example of demand drivers of copper from China, Mr. Joe Zhou, Project Manager Market Analysis, International Copper Association informed that in China industrialization and urbanization

were the key drivers for growth of Copper demand. He informed that 47% of the global copper produced is used in China. The largest demand for copper in China is from building and construction, infrastructure, transportation, and electronics industry. RE sector is key contributor to copper demand, followed energy efficiency in Distribution Transformer market, Room Air conditioner (RAC’s). Typically, copper usage increases 0.7% for every 1% increases in EER of heat exchangers in RACs.

In the coming years it is anticipated that the demand for copper will rise exponentially and hence it becomes even more crucial to have the fundamentals right to address the demand. Mr. Anil Kumar Nayak, Joint Secretary, Ministry of Mines, Government of India added that Ministry of Mines are taking important steps for copper exploration and ramping up the production and will continue doing efforts. HCL is going to increase its ore mining capacity from existing 3.8 million tonnes to 20 million tonnes. Moreover, capacity addition of Renewable Energy, penetration of EVs will boost investment in transmission and distribution and eventually lead to growth in copper demand.

Policy Scenario: There has been lack of reciprocity in India’s existing Free Trade Agreements (FTA), inverted duty structure, hidden subsidies in ASEAN economies like cheap electricity provision and non-tariff barriers in developed countries have hit India’s exports of refined copper. FTA was meant to increase bilateral trade. However, India’s FTAs with ASEAN and Japan have only resulted in increasing India’s imports with either stable or declining exports leading to the rising trade deficit. This is also adversely affecting the Indian Copper Manufacturers.

India’s exports to FTA countries has not gone up in the same proportion as imports because the pace of duty reduction in India was much faster compared to most of other FTA countries. According to

Economic Survey, FTAs have had a bigger impact on metals on the importing side and textiles on the exporting side. Under the current FTA structure it is also difficult to achieve “Make in India” vision. Mr. Rahul Prithiani, Director, CRISIL Research mentions at ICF 2018 that ‘In recent times we have seen the rise quality of growth but not in the rate of growth’. According to him, the overall policy scenario is prudent towards fiscal policies and repair and reforms of the fiscal systems are providing a stronger footing. The focus is on policy growth trends than cyclic growth. Hence the panel opined that the need of the hour is providing a level playing field to the copper manufacturers with Government’s support.

Key Challenges: Copper industry has many challenges on its way to growth. India imports ~94% of the raw material from far distance like Chile, Indonesia, Peru and is a major challenge for India copper industry. It is a very big challenge which smelters in India are facing. Some other challenges are:

Low Grade Concentrate of Domestic Copper and Import Dependency: India has almost no copper reserves and 97% of

the concentrate processes here is imported. While it has the capacity to produce copper in blister and refined copper form, its production of refined copper has mostly increased at a diminishing rate in the recent years, according to the study. It attributed this decline to the slowdown in Chinese demand which used to import almost 98% of India’s refined copper exports in 2012.

Continuous Surge in Imports and FTAs: The capacity in India is about a million tonnes. The consumption last year was almost at the same level as of 2016 at about 6,50,000 metric tons and the smelters or the Indian producers were able to sell only about 4,30,000 metric tons. The reason is we are also having imports into India from the ASEAN countries with whom India is having an FTA. This is putting a big challenge because of two reasons One is that for the FTA countries, the duty has become zero on copper imports. The second, smelting business is a huge working capital intensive business and for example, the size of our operations or Indian operations need about Rs 10,000 to 15,000 crore of working capital. The cost of working capital in India is relatively higher compared to the developed or the ASEAN countries. For example, in Japan, it is almost zero and that really poses a big challenge for the Indian producers.

Inflow of Unregulated Scrap: The unregulated copper scrap lead to safety and environmental hazards

Way forward – It is important that Government forms a dedicated Ministry for Copper / non-ferrous industry that shall track global developments in the copper sector and craft p policy in collaboration with industry. Safeguard against predominately import by means of standards, N.T.B, encourage growth of Downstream capacity, India friendly F.T.A.s etc. Liaise with key stakeholders in major end-use industries to ensure adoption of copper through through awareness and policy setting Devise and implement regulations and mechanisms to ensure economical and environmentally viable handling of scrap Coordinate with program managers of campaigns like Make in India, National Solar Mission, Smart cities, National Capital Goods Policy etc. to promote copper

Conclusion: An encouraging message ‘We are copper, you can twist us, you can bend us, but you cannot break us’ from Mr. Sanjay Chadha, Additional Secretary, Ministry of Commerce & Industry, GOI boosted morale of the copper fraternity. Overall its time that the industry and government collaboratively shift gears with key policy interventions. It will enable the copper sector to play a critical role and contribute effectively to India’s economic development.

“The need of the hour is providing a level playing field to the copper manufacturers with

Government’s support”

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GLOBAL OPPORTUNITIES AND CHALLENGESFOR THE INDIANCOPPER INDUSTRY

Copper, a malleable and ductile metallic element with its outstanding electrical conductivity, is and will remain to be the key metal wherever electricity is used. Already, 72% of copper consumption is in the power and utilities sector, and in electrical products. It is forecast that demand will grow at an annual 3.1% until 2022, exceeding growth over previous decades. Copper consumption is transitioning to a new growth phase driven by an “electrifying society”. With the electrification of energy, it is expected that share of Electrical Energy out of total Primary Energy shall increase substantially in future. Enhanced demand for Electrical Energy will create additional markets for Copper in Power Sector. The production, distribution and transmission of all that power will require a great deal of copper. Additionally, India is going to add Electric Vehicles in mobility sector in coming days. EVs consume more Copper comparatively to ICEs.

Moreover, Renewable energy uses copper more intensely than conventional power generation. Copper usage per megawatt hour of offshore wind and solar power generation is significantly higher than that for coal or nuclear power generation.

India’s copper consumption is concentrated in the Electrical industry in contrast with the rest of the world which is concentrated in Building and Construction. Copper and copper alloy are transformed by downstream industries for use in end use products such as automobiles, appliances, electronics, wires and cables and a whole range of other copper‐dependent products.

Impact of international policy & trade: Announcements has been made that US is doing fast track interaction with UK, EU and Japan for bilateral trade. Also, US, EU and Japan have issued a joint statement talking about the proposed reforms of the WTO and tightening of the rulebook around IP and subsidies. All of these trade agreements will have its own implications and India will need to have stronger and quality imports. Refined Copper imports have gone up significantly due to rules in FTA and change in tariff rules and duty reduction from Japan and ASEAN countries. Inverted duty structure is the main concern of the Indian copper industry, however, on the export front we have not utilized the market access and this year it has dwindled more. India still remains predominant exporter of copper cathodes.

Copper rod’s existing supply-demand and its challenges: The total Rod capacity in India to 1250 KTPA while the current demand in India is ~700 KTPA. Huge surplus of rod (~50%) putting pressure on the prices and quality in domestic market (corrective actions being taken to curb the imports). However, this huge surplus capacity opens up opportunity for global market.

One of the panelist Mr. Kaushik Vakil, Vice President, Hindalco Industries Ltd mentioned that there is a need to control impurities in basic raw material Copper Concentrate (CC) at Smelter stage. Different impurities can lead to different defects like wire breakages, reduced conductivity, etc. We need to depend on new innovations to reduce impurities. Innovations like inert gas purging/blanketing, improving filtration for clean lubricant system must be undertaken. Newly developed technique, SMS Contirod Technology by Hindalco enable a broad product range with diameters ranging from 8mm to 26mm CC rods. It will help in saving valuable foreign exchange for the country by cutting down the imports.

Opportunities and challenges for copper fabricators: Fabricating Industry purchases base metal like Copper Cathode (7403) from Primary Producers and only changes its form & shape. Secondary Producers are dependent to meet its demand for Raw Material i.e. Copper Cathode from imports that suffer 5% custom duty and domestic primary producers which also prices at import parity prices. Opportunities for the copper fabricating products will increase with growth in

Infrastructure & automotive Power sector with rise in demand for Copper Cables, Transformers & Electrical Switchgears India’s National Public Procurement Policy, extending preferences to domestic sourcing for government purchase

However, with these opportunities there are challenges standing tall for the industry. Top three challenges faced are:Surge in Imports: Threat from Imports has lately become the biggest hurdle for domestic copper Industry. Imports benefitting from FTA exemptions from ASEAN alone have been successful in outcompeting domestic producers and growing their market share at a rapid pace. More & more domestic producers are compelled to close their operations and industry is under huge survival threat. The Copper Tube industry is the worst victim.

High Cost of Capital: In India this is a huge bottleneck for Copper Industry that is naturally a capital-intensive sector.

Price Volatility: High Volatility in the Copper Prices has been a continuing trend & now even Zinc has fallen in the same cycle. This destabilize demand for copper & Copper alloys like brass and incentivize substitution threat.

Copper Cathode from imports that suffer 5% custom duty and domestic primary producers which also prices at import parity prices on the policy front industry is already suffering from huge imports from existing FTA’s mainly ASEAN due to which “Copper Tube Industry particularly” have been hit badly. Hence, there is an urgent need to resolve FTA anomalies. Regional Comprehensive Economic Partnership (RCEP) may give huge access to partner countries mainly CHINA who may start dumping their excess capacities in several items, including copper products, thereby harming the local industry and distorting trade in the process.

Key recommendations/Conclusion: The panel advocated to address Inverted Duty Situationby reducing custom duty on copper cathode and scrap. They suggested no tariff cuts underproposed RCEP and subvention to Copper Industry to create level playing field for domesticindustry. They urged that all regulators along with the government should look into the importscenario for the health of the overall domestic copper supply chain.

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ROLE OF COPPERIN TECHNOLOGY,INNOVATION AND TRANSFORMATION

Copper has been in use for centuries, but the metal, and the industry, has never stopped reinventing itself. Increasing demand from emerging market transformation technologies and some exciting new innovations are revitalizing one of the world’s most-used metals.

In the past few decades, increasing demand from developing countries such as China and India have increased and powered the exploration of the metal. The leading copper-producing countries like Chile, US, Peru, and smaller producers such as Russia and Zambia, have benefited from the growing appeal for the orange metal.

China’s demand for copper has almost tripled in the past decade with industry experts predicting that demand will further skyrocket in the next five years. But with the unexpected trade war between US/China they may see a drop in the market. Western industries on the other hand, have not only focused on its traditional applications but also have usage in newly detected antimicrobial abilities and its benefits for different sectors such as healthcare, aquaculture and air conditioning.

Copper in Heat Pumps: Copper is the finest metal for heat exchanger because of its high electrical conductivity is complemented by excellent thermal conductivity, which makes copper the first choice for heat exchanger applications. Heat exchangers are used for both cooling and heating purposes. But the cooling market is the dominant market for copper compared to heating market. There are reasons for it as in the heating market copper usage is less.

For example, in a coal fired boiler there is no copper used. But heat pump is a copper intensive and energy saving technology. Heat pump are majorly used for water heating purpose. Household heat pump water heater uses 6-8kg copper per unit while the commercial uses 30kg of copper for one 10HP commercial unit. Heat pump could supply heat and replace traditional heating equipment, like oil/coal boiler.

EU parliament has acknowledged Heat Pump as a ‘Renewable Energy technology’. Heat pumps are not only energy saving but also eco-friendly and reduce air pollution. Mr. Copper Zhao, Project Manager, High Efficient Heating, ICA mentioned that ‘Heat pump market increased from 1 billion USD to 3 billion USD in past five years. In China, Copper usage increased from 10K tons to more than 30K tons. Also, in China central and local governments accept air source heat

“Copper is the finest metal for heat exchanger because of its high electrical conductivity complemented by excellent thermal conductivity, which

makes copper the first choice for heat exchanger applications”

pump as renewable energy product’.

In India, Heat pump system is already available in market and is mainly used in commercial buildings for Hot water applications catering to 2% of Hot water needs, it is around 2%

market in Indian commercial building hot water market. On the policy front, it has been recommended to BEE to not only include Heat Pumps in ECBC Code but also try to make it mandatory as possible. Make Heat Pump as Mandatory for ECBC code. Additionally, it has been proposed to MNRE to classify heat pump as renewable energy product and provide reduced taxes & consider subsidies at par with solar energy products.

Copper in Electric Vehicles: India’s ambitious target for Electric Vehicles sales will be key driver for copper demand. Battery electric vehicles and plug-in hybrids require on average 3.6 times the amount of copper than an internal combustion engine (ICE). Copper usage increases quickly as battery size expands – the copper in a full-electric SUV tops 100kg and in an e-bus it reaches 300kg. Currently ICE vehicles represent some 7% of copper demand and BMO forecasts sales growth

of just over 10% by 2025 versus 2017. The additional copper required from the electrification of vehicles will propel copper demand from the auto sector over the 3 million tonne level.

“India alone need 400 million tonnes of copper with growth in EVs but about 10% penetration

may happen”

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Technology may drive EV designs at higher voltage and expects market of 300,000 Tonnes of Copper to build up with increased push for E-Mobility.

But how this demand will be driven considering the existing ecosystem and uncertain govt. policies? ‘We need to do thing differently and indigenously and ACT FAST’ said Dr. Prabhjot Kaur, CEO - Battery for Engineering (CEEV), IIT Madras. Batteries dominate the cost of an EV and account for 30-40% of overall cost. Larger the battery, more the cost. Small batteries create range anxiety. While larger batteries come at higher cost smaller batteries cause range anxiety. We clearly need affordable vehicles with small batteries that last longer but with no compromise on the quality. Dr. Kaur suggested a solution to do things differently by separating the battery business from the vehicle business. It is important to monitor batteries while charging & while in-use to maximize life, its performance. Unless this growth is unleashed the demand for copper may remain only documented!

Copper in aquaculture: ‘Traditional sea farming had caused serious environment impact resulting in low quality output and bad pollution. It is therefore necessary to upgrade to copper aquaculture’, said Mr. Wenson Zheng, Senior Marketing Director, ICA China. Copper’s one of the important properties is the anti-fouling. This anti fouling copper mesh is highly reliable during extreme weather compared to plastic mesh. Traditional plastic fish mesh has a serious environmental impact and low-quality output along with polluting the water.

Success case in Zhejiang, China has showcased survival rate of Copper Cage is 8.8% higher than traditional cage (90.3% Vs. 81.5%) and average weight per fish of Copper Cage is 50g more than traditional cage (480g Vs. 430g).

Mr. Sandeep Daga, Founder & Director, Regsus Consulting Pvt. Ltd while addressing ICF 2018 mentioned golden period of consumption has taken a long to reach the inflection point of demand in each case and India is closer to the inflection point of copper consumption. Business intelligence will play a crucial role in the copper consumption story and this will need access to information.

“Survival rate of Copper Cage is 8.8% higher than traditional cage

(90.3% Vs. 81.5%) and average weight per fish of Copper Cage

is 50g more than traditional cage (480g Vs. 430g)”

Conclusion: Increasing disposable income in emerging economies, as well as the adoption of greener technologies and electric vehicles boom, will drive most of the expected increased demand in copper during the next few years. The panel opined that it will be that global infrastructure transformation what will first affect global copper demand followed by electric vehicles. The message was loud and clear that copper is the future and will remain dominant with growing technology, new innovations and market transformation.

A

B

D E

C

INDIA

CHINA

EUROPE, US

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ICF 2018 recognised the organizations and individuals for best practices using copper.

COPPER EXCELLENCE AWARD FOR ENERGY EFFICIENCY

SAIL, Durgapur Steel Plant.For adopting IE3 rated motors for better energy savings

and improving plant efficiency.

COPPER EXCELLENCE AWARD FOR MANUFACTURING EXCELLENCE

Jindal RectifiersFor providing 100% copper-based solutions to address

power quality issues faced by the industry.

COPPER EXCELLENCE AWARD FOR MARKET TRANSFORMATION

Apar Industries Ltd.For improving reliability of solar PV installations by

encouraging adoption of copper cables.

COPPER EXCELLENCE AWARDCOPPER EXCELLENCE AWARD FOR TECHNOLOGY INNOVATION

Non-Ferrous Metals Technology Development Centre.

For widespread implementation and development of electrical drives including motors, power controllers and

battery for domestically produced electric vehicles.

COPPER EXCELLENCE AWARD FOR TECHNOLOGY ADOPTION

E-Vision.For adoption of economical, eco-friendly and efficient smaller diameter (5mm) inner groove copper tube for

improved reliability in room air conditioner.

COPPER EXCELLENCE AWARD FOR MARKET TRANSFORMATION

Johnson Control-Hitachi Air Conditioning India Ltd.For successfully providing reliable and energy efficient

room air conditioners by using 100% Copper tubes.

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COPPER EXCELLENCE AWARD FOR ELECTRICAL SAFETY

Mr. Ramana Prasad.For Successful implementation of Electrical Safety Inspection in High Rise Building for the state of

Telangana.

COPPER EXCELLENCE AWARD FOR LIFE TIME EXCELLENCE AWARD

Padmashri Shri Rameshwarlal Kabra.To celebrate his outstanding contribution in shaping the

wire and cable industry in India.

COPPER EXCELLENCE AWARD FOR OPERATIONAL EXCELLENCE

M. P. Paschim Kshetra Vidyut Vitaran Company Ltd.For innovation in improving reliability and energy

efficiency of on-field distribution transformers through active repair method

43 Media Attendees

18 Print coverages

10 Interviews executed

55 Media exposure via wires

(PTI,UNI,IANS)

Trade Journals 5%Online media 35%

Regional dailies 40%English dailies 20%

5%

20%

40%

35%

PR COVERAGE

32 33

MEDIA ATTENDEES

WIRES

FINANCIALS

MAGAZINES

ONLINE

REGIONAL

VIDEOGRAPHER/PHOTOGRAPHER

34 35

36 37

Facebook

Linkedin

Total Likes -1,498

Total shares -67

Total comments -

162

Total audience reach -

22,284

Total impressions -

34,333

Total posts -99

Total Likes -152

Total shares -52

New followersgained - 27

Total impressions -

7,915

Total posts -99

DIGITAL COVERAGE

38 39

Twitter

Summary

Total impressions -

77.5k

Total tweets -131

Total likes - 492

Total retweets -547

Total impressions -

119,748

Total posts onall platforms -

329

Total likes - 2,142

Total shares/retweets -

547

The innovation booth at ICF2018 showcased inventions made by ICA India and its partners across its various programs such as Electrical Safety, Distribution Transformer, Power Cable and Motors. The Association’s partners also leveraged the opportunity to showcase their range of copper products and applications.

A building wire house model was also exhibited at the innovation booth. To prevent fire hazards at home follow these simple preventive measures –

Select the right size of wires. Do not overload the electrical circuits. Follow the right electrical installation and earthing practices. Have a periodic inspection of the electrical installations.The innovation booth had also showcased fire survival & solar cables. While fire survival cables help to maintain circuit integrity during a fire, solar cables work effectively in extreme environments & have improved mechanical properties.

DIGITAL COVERAGE INNOVATION BOOTH

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The innovation booth at ICF2018 showcased inventions made by ICA India and its partners across its various programs such as Electrical Safety, Distribution Transformer, Power Cable and Motors. The Association’s partners also leveraged the opportunity to showcase their range of copper products and applications.

Copper winding wires were also exhibited at the ICF2018 innovation booth. Due to its uniformity & consistency of insulation, copper winding wires are majorly used in energy efficient equipment, E- vehicles, electrical devices & high-temperature applications.

Copper busbars were showcased at the innovation booth at ICF2018. The advantages of using copper busbars are - high mechanical strength in tension, compression and shear, high resistance to corrosion and fatigue failure and high eventual recovery value.

The entry to the venue had a beautiful Nissan Leaf plugged into a charging station beside the car. It’s a representation of the future of sustainable mobility which is as easy as plug and play.

Exicom Multi-Standard Chargers for Electric Vehicles :Exicom offers a comprehensive range of solutions for all EV charging infrastructure projects and has extensive experience of installing EV charging equipment on highways, public sector and private land. A DC fast charger was displayed along with the Nissan leaf EV at ICF.

INNOVATION BOOTH ELECTRIC VEHICLE BOOTH

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