The SPA has been entered into by Birla Mt Gordon Pty Ltd, a wholly-owned subsidiary of Birla Mineral Pty Ltd, which is a wholly-owned subsidiary of Hindalco Industries. The acquisition will be funded through a debt-equity ratio of 60:40.
While announcing the acquisition on Tuesday, Kumar Mangalam Birla, chairman, Aditya Birla Group, said, The acquisition of Mount Gordon is a major strategic step in our move to become a globally competitive, integrated copper player. It is a proactive step to entrench ownership in upstream mines. The acquisition is a good fit with our current Australian operations. Mr Birla added that the acquisition had come at a very opportune time, subsequent to the successful stablisation of Nifty copper mines, which were acquired earlier this year.
In his presentation to the media, Debu Bhattacharya, managing director designate, Hindalco, said the Mount Gorden Copper mine owned by Western Metals had gone into receivership since July 2003. He further said that a SPA was entered into on Tuesday to acquire the Mount Gordan Copper mine from Western Metals Copper Ltd and Western Metals Ltd.
According to Mr Bhattacharya, the acquisition of Mount Gordon accords Hindalco a significant opportunity to capture a greater portion of the copper value chain after having acquired the Nifty copper mines while it also enables the the AV Birla Group to further consolidate its standing in the Australian copper industry. Our intent is to establish copper operations of global significance in Australia, he added.
An upside is the acquisition of two joint venture sites mount Oxide and mount Osprey in which the Birlas can acquire 62.5 per cent. Mr Bhattacharya said that the stake in each will cost Australian $1.5 million.
A company press release stated that for the year 2002-03, the Mount Gordan Copper Mine produced nearly 46,000 tonne of copper cathode. Mr Bhattacharya announced that the company aims to convert the facility to concentrate production within the ensuing nine months. He said that the company was confident of producing 50,000 tonnes of copper in concentrate per annum. Hindalco will set up a concentrator at a cost of approxiamately Australian $10 million for producing concentrates. Till the time the concentrator is installed, the cathode production will continue and is expected to take 6-8 months, Birla officials said.
The reported rersources of the mines are estimated at 20 million tonne of ore grading 3.6 per cent copper. Together, Mount Gorden and Nifty Copper mines will cater to more than one-third of Birla Coppers concentrate requirement.
The Nifty acquisition is now stabilised and we will use this as a growth platform in copper mining and our operations as a whole in Australia, Mr Bhattacharya said.