Adani Group Set to Launch $5 Billion Metals Venture Amid Consolidation in India's Sector

Mumbai, November 12 -- The Adani Group, a major Indian conglomerate, plans to invest $5 billion in the country's metals sector over the next three to five years, according to two people familiar with the matter. This move comes two years after the group made its mega entry into the cement sector.

The investment is expected to be utilised for mining, refining, and production of copper, iron, and steel, as well as aluminium. The conglomerate will challenge established players such as Vedanta Ltd., Hindalco Industries Ltd, and Tata Group, leveraging synergies from its existing businesses in renewable energy, transmission, logistics, ports, and infrastructure.

Adani, which has an edge in metals due to captive consumption, expects the investment to help control costs and production. The group aims to produce aluminium assets to support its green energy businesses and maintain competitive pricing in the market.

"The benefit can be further passed on to consumers. As the production costs are lower, the output costs will also be low," a person close to the group said. "Further, at the macro or industry level, demand-supply balance will ensure less volatility of these commodities and lower dependency on foreign suppliers."

The $5 billion investment is expected to be allocated between copper ($2 billion) and other metals (($3 billion). Major players in the aluminium, zinc-silver, iron-steel, and nickel sectors include Vedanta, Tata Group, Hindalco, and JSW.

Adani will utilise its existing expertise in mining to reduce costs and boost production efficiency. This move is likely to impact India's largest metals businesses. While Adani will face competition from major players like Vedanta and Hindalco, analysts expect the conglomerate will gain an edge through internal synergies and efficient supply management.

"India's direct copper demand is expected to double over the next five years," one of the sources said. "A more significant reason for the Group taking this step is captive consumption."

An email sent to Adani Enterprises Ltd, the flaghsip company of Adani group remained unanswered, however Adani Group marked its mega entry into the country's cement sector by acquiring Ambuja Cements Ltd and ACC Ltd for $6.6 billion in 2022 and since then it has been eyeing significant consolidation in the metals sector.

This move will further bolster Adani's presence in India's industrial sector as the group continues to expand its portfolio of businesses under various sectors such as, power transmission, logistics, ports and renewable energy.