Hindustan Copper draws up Rs 5,500-crore plan to expand its ore capacity

State-run Hindustan Copper (HCL) has drawn up a plan to expand its copper ore capacity by five times to 20.2 million tonne per annum (mtpa) at a cost of Rs 5,500 crore. The company targets to complete the fist phase of the plan, which will take its capacity to 12.2 mtpa, by 2028-29.

HCL is the lone copper producer in the country. Its ore output is used solely for captive purpose. The PSU operates mines at Malanjkhand in Madhya Pradesh, Khetri in Rajasthan, and Surda and Kendadih, both in Jharkhand. Rakha mine in Jharkhand has been closed since August 2021, but the company is seeking to renew the licence for the mine.

Of the investment of Rs 3,434 crore to be made in the first phase of the ore capacity expansion plan, Rs 1,856 crore will be spent on Malanjkhand mine. In the second phase, HCL will invest Rs 2,066 crore to raise the capacity further to 20.2 mtpa.

India has very limited known reserves of exploitable copper. Currently, India’s copper share of the world’s reserve is a measly 0.31%. The total resources of copper ore in the country in terms of copper metal is estimated to be 2.73 million tonne (mt).

HCL uses ore primarily to produce metal concentrate. Of late, its focus has shifted to selling copper concentrate directly to refiners. Sterlite and Birla Copper use concentrate to produce refined copper. In 2020-21, India’s refined copper production was 0.36 mt. HCL had nil contribution in that.

HCL’s two refineries — one each in Gujarat and Jharkhand — has a cumulative 68,500 tonne of refined copper production capacity. The Gujarat Copper Project has 55,000-tonne capacity and the remaining at Indian Copper Complex in Jharkahnd. Operations at the two sites have been suspended due to profitability issues.

With the expansion of the mine in future, HCL will start producing more copper concentrate that can be utilised either by domestic custom smelter or by its own smelter plant in order to cut the overall import bill of India and higher utilisation of plant capacities, said the latest parliamentary panel report.

India’s net copper imports were worth $5.5 billion in 2019-20. Its consumption of refined copper in 2020 was 0.66 mt.

The per capita consumption of copper in the country is now around 0.6 kg against the global average of 3.2 kg.