Exclusive: HCL to restart 50,000-T refinery in Gujarat which recycles copper after 6-yr hiatus, say sources

New Delhi: State-run Hindustan Copper Limited (HCL) is planning to restart its 50,000-tonne secondary copper smelter and refinery in Gujarat’s Bharuch district after a six-year-long hiatus, PSU Watch has learnt reliably from two separate sources aware of the development. “The decision is driven primarily by improved market conditions and a continued rally in the price of copper globally since 2024,” said one of the sources. Copper prices have shown strong recovery and sustained demand over the last two years, moving from over USD 8,000 in 2023 through a bullish rally in 2024 to above USD 10,000 and continuing appreciation in 2025 to USD 11,000 amid robust global demand and constrained supply. As of November 2025, copper prices are near USD 10,740 per tonne, marking a solid gain of over 12 percent compared to one year ago and a 7.5 percent increase month-on-month.

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In addition, the government has also just announced a Rs 1,500-crore incentive scheme in October to promote large-scale recycling facilities that can extract critical minerals from secondary sources such as electronic waste and spent lithium-ion batteries. Copper, a metal which retains its chemical and physical properties fully even after being recycled, fits right into the government’s scheme. Categorised as a strategic mineral, Copper is used widely in the clean energy industry, right from electrical wiring to solar panels, wind turbines, electrolysers and electric vehicles (EVs) etc.

HCL to scout for a partner to revive 50,000-T Gujarat copper refinery: Sources

“HCL will start looking for a partner to restart the Gujarat refinery. This will be on a revenue-sharing basis,” said one of the sources quoted above. On being asked if the state-run company will scout for global partners, the source said, the company will look both within the country and outside.

HCL acquired the plant and machinery, including lease hold land of Jhagadia Copper Ltd (JCL), from Asset Reconstruction Co (India) Ltd in June 2015 for Rs 210 crore and renamed it as Gujarat Copper Project. The plant commenced production in 2016. However, it has been dormant since 2019. “Market conditions were such that copper recycling became financial unviable. And therefore, operations have been suspended since 2019,” said an official.

The plant was setup in technical collaboration with Sweden-based Outokumpu Technology AB (formerly Boliden Contech AB) and is capable of processing a wide array of copper bearing materials, including e-scrap, to produce LME-A grade copper cathode, according to HCL.

Recycling margins improve, but scrap sourcing remains key challenge

According to Sehul Bhatt, Director, CRISIL Intelligence, the near-term economics of secondary refining have turned favourable again. “The Indian copper market is expected to witness a demand of 1.55–1.65 million tonnes in FY26, with recycled copper accounting for 25–30 percent of this demand,” he said.

“The recycling margins of copper are significantly better than the primary smelting business; however, scrap sourcing is a key challenge,” Bhatt added. He noted that India relies heavily on imports to meet its scrap needs, with around 50 percent of copper scrap imported.

“As copper scrap prices move in line with refined copper prices, whenever there is a price movement, copper recyclers’ margins move in the same direction due to inventory cost adjustments. Although manufacturers hedge to safeguard against adverse price fluctuations, it eats up a portion of the margin,” he said.

Bhatt expects copper prices to increase by 4–6 percent in FY26, driven by disruptions in global copper ore supply.

Copper recycling central to India’s critical minerals strategy

Experts see copper recycling as vital to India’s broader clean-energy and supply-chain goals. Saloni Sachdeva Michael, Energy Specialist, India Clean Energy Transition, Institute for Energy Economics and Financial Analysis (IEEFA), said, “Recycling is a key focus under the National Critical Minerals Mission (NCMM), which aims to strengthen India’s self-reliance and supply chain resilience in critical minerals.”

The government’s recently approved Rs 1,500-crore incentive scheme under the NCMM targets the development of 270 kilotonnes of annual recycling capacity, generating 40 kilotonnes of secondary critical minerals, attracting Rs 8,000 crore in investment, and creating nearly 70,000 jobs, she said.

Michael added that India’s copper recycling ecosystem can play a crucial role in reducing import dependence. “India imported 2.3 million tonnes of copper ores and concentrates in FY24–25 from countries such as Chile, Indonesia, and Peru. This heavy reliance on imports underscores the importance of recycling and secondary copper recovery,” she said.

“Copper is 100 percent recyclable and retains its chemical and physical properties indefinitely. Strengthening the recycling ecosystem can therefore help India meet rising copper demand sustainably, while reducing dependence on imported concentrates and ores,” she noted.

Formalising recycling to raise copper recovery

Michael said that making secondary copper production more attractive requires formalising the recycling sector, rationalising taxes, and aligning fiscal incentives under the NCMM. “Reducing GST on registered recyclers can create a level playing field with primary producers, while simplified licensing and concessional financing would encourage the formalisation of informal operators,” she said.

While about 30 percent of India’s copper consumption comes from recycled metal, she said this share could rise substantially with deliberate interventions, including better collection systems, tax reforms, and guaranteed offtake for recycled copper. “Building industry confidence in the quality and reliability of recycled material will drive its adoption in manufacturing,” she added.

Copper demand to triple by 2047

India’s copper demand is projected to reach 3–3.3 million tonnes by 2030 and 8.9–9.8 million tonnes by 2047, according to the Ministry of Mines’ vision document (2025) — a five- to six-fold increase from current levels. Amidst this backdrop, the revival of HCL’s Gujarat Copper Project could play a crucial role in establishing domestic recycling capacity.

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