(MENAFN- Live Mint) Billionaire Gautam Adani's copper business, Kutch Copper Ltd (KCL), has signed a non-binding agreement with Australia's Caravel Minerals Ltd to accelerate development of the Caravel Copper Project in Western Australia with an initial capital expenditure of AUD 1.7 billion ($1.1 billion).

Under the partnership, KCL, set up as a unit of Adani Enterprises Ltd in 2021, has been granted first right to either purchase equity or invest directly in the mining project, the company stated on Thursday.

This deal also allows KCL to purchase almost all the copper produced by Caravel's mine, which is approximately 62,000 to 71,000 tonnes per year at the outset. This copper will be sent directly to Adani's new $1.2 billion smelter in Gujarat, which is the world's largest copper plant at one location, the statement said.

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KCL has a copper smelting and refining complex, with a capacity of 0.5 million tons a year.

With global copper demand projected to surge by 50% by 2040 amid electrification and renewable -energy expansion, the Ahmedabad-based conglomerate said it believes the Caravel-Kutch Copper collaboration is positioned“to deliver a significant contribution to critical minerals supply chains”.

“Copper is the backbone of the global energy transition, and our partnership with Caravel Minerals strengthens India's and Australia's role in building a resilient and responsible supply chain for this vital metal,” Dr Vinay Prakash, chief executive officer of Adani Natural Resources, said in the statement.

The Caravel Copper Project, located about 150 km northeast of Perth, is one of Australia's largest undeveloped copper resources, with a potential mine life exceeding 25 years and an estimated 1.3 million tonnes of payable copper.

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Adani's latest partnership for copper in Australia comes as the company's Carmichael coal mine, for which it paid A$681 million in 2010, generated over $1 billion in revenue last year.

According to an August report titled India Copper Report 2026 by the Centre for Social and Economic Progress, India's copper demand is expected to rise sharply. By FY2030, traditional sectors such as construction, industry, and electricity are projected to consume approximately 3.24 million tonnes of copper. The energy transition sector, which is currently smaller, is also expected to grow rapidly, with demand likely to reach 274,000 tonnes by the turn of the decade.

The report also stated that, despite significant reserves, India remains a net importer of copper due to low exploration success, outdated technologies, exhausted mines, the inefficacy of auctions in attracting new mining and exploration blocks, insufficient investment, and limited private sector participation.

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India has a demand-supply mismatch in copper, an analyst said. Indian copper producers rely heavily on imported copper concentrate, making them vulnerable to price swings and supply disruptions, said Sumar Kumar, AVP metals and mining at brokerage Philip Capital. The Caravel deal“appears to be a step in the right direction for Kutch Copper, where partnering in copper mines (in) backward integration can help them control costs better and protect their margins.”

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