Government owned Hindustan Copper Ltd (HCL), the country?s sole copper miner, has firmed up plans to increase the mining capacity of its Malanjkhand open pit mine from 2 million tonne per annum to 5mtpa while also getting a new lease to explore a new mining area in Rajasthan.

Shakeel Ahmed, chairman and managing director, said, the HCL board on Friday has cleared the expansion programme of the open pit Malanjkhand mine, only the first step towards the project?s implementation.

?This proposal will go to ministry now and then to the planning commission. After the planning commission?s clearance it will go the public investment board,? Ahmed said.

He said an investment of Rs 2,500 crore has been estimated as of now and the company is inclined to execute it with a partner on a risk-sharing basis. After expansion Malanjkhand would be India?s deepest base metal mine, Ahmed said.

The lease for exploring a new mining area, Banwali Ki Dhani, in Rajasthan has been recently approved by the Rajasthan government and HCL would shortly start exploring it. Ahmed said the new lease has two areas ? one 36.1 sq kms and the other 1207 sq meters with an estimated (geographical survey of India estimation) reserve of 85 mt. HCL might go for a joint venture to develop the mine.

The HCL board has also cleared expansion of Khetri- Kolihan mines from 1mtpa to 3mtpa and the bids for appointing an independent appraiser has been opened on Friday, Ahmed said.

HCL on Friday reported a profit after tax of Rs 154.68 crore on a net sale of Rs 1304.52 crore for 2009- 2010 against loss of Rs 10.31 crore on a net sale 1190.15 crore in 2008-09.

For the quarter ending March 2010, the company posted a net profit of Rs 91.74 crore on a net sale of Rs 409.76 crore against net profit of Rs 3.78 crore on a net sale of Rs 344.70 crore during the corresponding period last fiscal.

Ahmed said that higher copper prices in London Metal Exchange (LME) contributed to the profit, while production in every month of the last quarter was 30% higher than that of the corresponding period?s production. While the average copper price in LME was $ 6101 per tonne in 2009-2010, in 2008-2009 it was $ 5863 per tonne.

On disinvestments, Ahmed said the law ministry is yet to give its comment on the draft note, although all other concerned ministries have given favourable comments. HCL expects the draft note to be cleared in another 15 days, following which it would be forwarded to the Cabinet committee on economic affairs.

HCL would be divesting 18.4 crore equity shares with face value of Rs 5 each. While the government, which has 99.5% holding in the company would divest 10%, fresh equity of 9.2 crore shares or 10% of the total 92 crore equity shares would be issued to HCL, which in turn would offer those to the market. Post disinvestment, the government?s holding in HCL would come down by 18%, Ahmed said.

He said the company aimed at mopping up Rs 4,000-5,000 crore from the disinvestment. Pre-disinvestment, the company is eying copper assets in Chile, although ?there is no breakthrough on this front as yet,? Ahmed said.