Reported By:
| Edited By: Swati Khandelwal |Source: Zee Business |Updated: Dec 17, 2018, 05:40 AM IST
Hindustan Copper plans to increase its production capacity to 20 million tonne per annum (mtpa) in the next six years from 4.1 mtpa to be achieved by the end of this fiscal, said Santosh Sharma, chairman and managing director, Hindustan Copper, during an interview with Swati Khandelwal of Zee Business.
Copper prices are stable since the last two-and-a-half months and have been in the range of Rs $6200-6300/tonne. I feel the prices will rise to $6500/tonne by March 2019. The price hike will be backed by the decline in its stocks even at London Metal Exchange (LME).
Indian Railways, which has plans to electrify about 37,500 kilometres of its track, is going to be the biggest growth driver for Hindustan Copper. The power sector will be the second biggest growth driver for us, as copper will be required in the renewable sector, like solar and hydro and power transmission. Similarly, copper will be demanded in the hybrid car section. Other programmes like Make in India and housing for All can also boost copper demand.
There is no shortage of copper in the market. There is a decline in exports, which once stood at two lakh tonne. Closure of Vedanta has had an impact on exports, which is on a decline. But its closure didn't have any impact on the domestic market, mainly because our peer firms have diverted their production meant for export purposes for domestic consumption. India consumes just 6.5 lakh tonne of copper in a year, while it has a production capacity of 10 lakh tonne. This means any production above 6.5 lakh tonnes is meant for export purposes only.
Our net profit has increased by 81% in H1FY19 when compared to the PAT of H1FY18, and we reported an Ebitda of 28% in H1FY19 against 16% in H1FY18. This growth was backed by our production, which increased 20% in this fiscal. Apart from this, there is a change in our strategy under which we have decided to focus on the ways to maximise our profits instead of concentrating on revenue or turnover of the company. In the process, we want to strengthen secondary our resources, that is functional in the non-LME stream. The section will be strengthened to ensure that our company remains strong in the case when there is a weakness or fall in the LME stream. The third thing is that we want to meet the demand created through several government schemes like electrification of railways, push to infrastructure and focus on renewable energy sector.
We have plans to take our production capacity from 4.1 mt, which will be achieved by the end of this fiscal, to 20 mt in the next six years. This expansion will be backed by Rs 200 crore exploration plan. It will be used in the expansion of major mines like Rakha and Chapri mines in Jharkhand and Malanjkhand mine of Madhya Pradesh. Half of the work for increasing the Malanjkhand mine capacity from 2.5 mt to 5mt has been completed. It will become operational in the next three years. We also plan to open new mines like Chapri and have received tenders for it. We will also reopen mines closed due to low LME such as Rakha mine.
