Hind Copper to start work at 4 mines by December

Hindustan Copper Ltd, the only miner of the metal in India, will start expansion work at its four mines by the end of this calendar year, taking the total number of mines under development, including greenfield, to six.

The additional production from these mines is expected to reflect on the topline and bottomline of the company in the next three years.

A huge gap of approximately 97 million tonne (mt) between demand and production of copper ore in India, any capacity addition gets a ready market, which augurs well for Hindustan Copper.

In fiscal 2011 India’s refined copper capacity was around one mt, requiring approximately 100 mt of copper ore (assuming a copper content of 1%), according to the company’s annual report.

This was against a domestic copper ore production of 3.6 mt.
Shakeel Ahmed, chairman and managing director of Hindustan Copper, said while work on two of its mines, both located in Khetri, is under progress, awards for another four will be given soon to the selected engineering, procurement and construction contractors.

 “Financial bids have been received and the evaluation process is over. A final approval is expected to be given by the Board in its next meeting in October,” he said.

Under its mine expansion plan, Hindustan Copper would increase its copper concentrate ore production capacity from 3.6 mtpa to 12.4 mtpa by 2015-16 at an investment of `3,677 crore over the same period.

The company has a total eight mines in Madhya Pradesh, Jharkhand and Rajasthan. The company is expanding Malanjkhand, Khetri, Kolihan and Surda mines; re-opening Rakha and Kendadih mines and developing new mines— Banwas and Chapri-Sidheswar. Out of these, work at Khetri and Banwas has already started.

Ahmed said the outlook for London Metal Exchange copper prices is buoyant for the next 3-6 months and the company expects to post a robust performance in the current year and next year as well.

Ramesh Iyer, vice-president, product development, National Commodity Exchange, said there is no immediate trigger for copper prices to come down.

“We see a strong support at Rs400 per kilogramme level and at least for the next three months no surprises are expected. While it will not scale the highs of December and January, but will hold around the same level which is a good sign,”  he said.