December 6, 2020
The London Metal Exchange shows a 65 percent increase in copper prices since March
Rising copper prices are linked to recent increases in demand from countries recovering from the pandemic
The government is creating mining opportunities in 2021 with amendments to the MMDR Act
These reforms will encourage private sector investment and participation in the copper sector
The copper sector in India is gearing up to meet growing demand of a recovering global economy with recent changes to the Mines and Minerals (Development and Regulation) (MMDR) Act, as an increase in copper prices and order flow indicate the potential of sector activity in the coming year. The London Metal Exchange shows an 18 per cent increase in copper prices this quarter, which have recorded close to a 65 percent increase since March, as reported by Mint on December 6.
These prices are directly linked to a steady rise in demand for copper from countries, particularly China, aiming to leverage the recovery of post-pandemic markets. Statistics published by Goldman Sachs International forecast a 33 percent rise in copper prices over the next two years while the increasing prices of industrial commodities such as iron ore, coal and steel showcase a resurgence in global manufacturing activity and requirements.
Currently in India, various sectors have rebounded strongly from the effects of the lockdown, inviting investment and economic growth for the country. In 2019, the closure of a major copper smelter in Tamil Nadu nearly halved overall production of the base metal as India recorded net imports of copper for the first time in two decades. The government is aiming to create opportunities for the mining sector in 2021 with amendments to the MMDR Act, designed to improve mineral exploration for concealed deposits of precious metals, copper, zinc, and lead.
Additionally, these reforms will involve changes to the Act that encourage private sector investment and participation in the market, with the possibility of further considerations for rationalisation of taxes in mining activity. With the help of initiatives such as the Atmanirbhar Bharat scheme, the government is able to enhance private investments and drive further reforms in the mineral sector.