Hind Copper plans Rs1,320 cr expansion

Hind Copper plans Rs1,320 cr expansion
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First Published: Wed, Feb 14 2007. 11 10 PM IST
Updated: Wed, Feb 14 2007. 11 10 PM IST
Perth: Hindustan Copper Ltd, the biggest state-owned producer of the metal in India, may spend as much as $300 million (Rs1,320 crore) to extend a mine underground and take advantage of a three-fold increase in copper prices in the past five years.
The open pit at Malanjkhand in Madhya Pradesh will run out in five years without expansion, said Satish Gupta, chairman of Hindustan Copper, on Tuesday.
The company has appointed a UK consulting firm to conduct a study, he said, without giving details.
“We may raise finances and get somebody to construct the mine,” said Gupta at a mining conference in Perth, Australia.
The existing mine produced 20,000 tonnes of copper last year, almost two-thirds of the Kolkata-based company’s output, he said.
Demand for copper in India and China, the two fastest- growing major economies, helped push cash prices to a record $8,800 a tonne in London in May 2006.
Prices may average between $5,500 and $6,000 a tonne this year as supplies increase, said Gupta. Prices of copper for immediate delivery averaged $6,739.80 a tonne last year.
Long-term copper prices may stay above $4,000 a tonne, Gupta said.
Shares in Hindustan Copper, which have risen by 63% over the past year, fell 0.3% to end at Rs91 on the Bombay Stock Exchange.
Hindustan Copper may sell debt or raise bank borrowings to fund the expansion that will cost $200-300 million, or find a partner to form a venture to build it, Gupta said.
The company, however, plans to operate the mine, he added.
The company mines 33,000t of copper a year from three mines and can refine 47,500t annually.
Credit Suisse Group expects India’s share of world copper consumption to rise to 10% by 2010 from 4% now.
India has a processing capacity to refine 900,000t of copper a year, and only produces 30,000t of the metal itself, Gupta said.
The plan is to try and increase more domestic production and import less ore for processing, he said.
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First Published: Wed, Feb 14 2007. 11 10 PM IST
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