Enthused by a rise in net profit in 2007-08, the state-run Hindustan Copper Ltd (HCL) has submitted an application with the government of Madhya Pradesh for reconnaissance permit for an area of 1,600 sq km in the district of Balaghat.
According to sources, HCL has now applied for prospecting licence (PL) across the country for acquiring possible areas for exploration. Similarly, the company has also made various applications for mining lease/reservation of areas with the states of Jharkhand, Rajasthan, Haryana and Madhya Pradesh.
The Centre, had last year, approved a financial restructuring package for HCL to wipe out its accumulated losses. Subsequently, both the government and the HCL are looking at ramping up its production. HCL?s net profit for the January 2008 to March 2008 stood at Rs 85.45 crore and for 2007-08 it was Rs 267.40 crore.
The government was exploring the development of Banwas mine through HCL?s own strategic resources or through a strategic partnership. Sources added that due analysis for captive mining by HCL and outsourcing was done. Now, the company has decided to outsource the developmental work in the mine after suitable protection and legal clauses are incorporated for safeguarding the interest of HCL. The contractual agency has been short-listed and clarifications regarding various approvals have been sought from the ministry of mines and the state government. The Banwas mine has 25 million tonne deposit and has a copper content of 1.69% and development cost is expected to be around Rs 500 crore. The company has also floated a global tender for the 42,000 metre long-term mine development work at Khetri Copper Complex (KCC) at Khetrinagar, Rajastan and the tender will be opened on June 30, 2008.
The development of the mine will involve deployment of modern underground equipment such as drill jumbos (for faster development and larger pull per round), LHD?s, LPDT?s and modern track equipment. The contract period is five years from the date the contractor starts mining.
On the Surda mines, the government is keen to see that the entire process ensures the involvement of HCL personnel at all levels to facilitate transfer and sharing of skills and knowledge. HCL had outsourced the revival and operation of Surda mine in Jharkhand to the Australian group Monarch Gold Mining.
During the year 2007-08, the mine produced 314 mt metal-in-concentrates (MIC) and for 2008-09, the mine is expected to produce 4,000 mt of MIC.
The domestic demand for copper in India is expected to grow rapidly over the next 4-5 years. The key drivers of this demand are government?s thrust on power sector and the rapidly growing real estate and automotive industry.
The strong demand is also supported by increasing export opportunities to China. Overall, India is considered to have entered a material intensive growth phase driven by growth in core industries and end consumption.
Led by Hindalco and Sterlite, the country has the capacity to refine 1 million tonne of copper. However, the MIC is the key component for refined copper and HCL currently has only 31,378 tonne of MIC from its own mines. Most of the other players including HCL depend heavily on imports of MIC to make refined copper and keep the smelter plants running. Last year, HCL imported 54,398 tonne of MIC. Reopening and getting the Surda mines is one of the key components for HCL to become MIC surplus. Surda has a 26 million tonne deposit witha copper content of 1.2% and Surda and Banwas together is expected to produce 19,000 tonne of MIC once they attain full production.
