The Hindu : India's crucial role in global copper market

Online edition of India's National Newspaper
Friday, Mar 12, 2004

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India's crucial role in global copper market

By Our Special Correspondent

NEW DELHI, MARCH 11. India is gradually becoming an important player in the global copper market, but there is more hard work to be done if India wants to catch up with China's growth, not just in total copper demand, but overall economic activity.

This observation was made by Lord Bagri, CBE, Hony. President, London Metal Exchange, and Chairman, Metdist Group, U.K., at an international symposium on `Copper — The Emergence of India on the Global Map', jointly organised by the Confederation of Indian Industry (CII) and the Indian Copper Development Centre (ICDC).

Comparing India and China, he said China was surprisingly an open economy where import duties for 262 types of machinery were zero based, while the average for the remainder was just 10 per cent, down from a range of 12-18 per cent last year. There are no import duties on concentrates, just 2 per cent for both blister and cathode and 6 per cent for copper and copper alloy semis, a reduction from 8 per cent prior to 2000, he said.

India on the other hand, Lord Bagri, said was more protective. Even though duties have been reduced quite significantly, they remain high compared with the rest of Asia and especially China, he added. Lord Bagri was of the opinion that this duty structure had encouraged the development of custom smelters and refineries in India with cathode production increasing from 42,000 tonnes in 1996 to nearly 4 lakh tonnes last year.

"Because of the attractive duty differential between cathode and concentrates, it is not surprising that domestic custom smelters, while actively seeking overseas mining assets have shown little enthusiasm for risky grassroot exploration at home," he said.

P. Balakrishnan, Executive President, Hindalco Industries, was of the view that the main challenges still facing the copper industry were to expand the market for metal for domestic consumption. He said sustaining the growth rate of 7-8 per cent in primary copper demand in India would be a major challenge. "The industry will have to put in its efforts to develop new copper intensive applications and products ," he said.

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