Hindustan Copper to Quadruple Ore Production in Next Five Years

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hindustan Copper Limited (BSE:513599) (HCL) (Kolkata, West Bengal), India's only integrated copper producer, plans to increase production from its mines from 3.15 million tons per year to 12.5 million tons per year over the next five years.

HCL has four operating units:

• the Khetri Copper Complex, Khetri Nagar, in the central Indian state of Rajasthan
• the Indian Copper Complex in Ghatsila, Jharkhand
• the Malanjkhand copper project in Madhya Pradesh
• the Taloja copper project in Maharasthra

The company's plan to increase ore production consists of three steps:

• the expansion of the Malanjkhand mine from 2 million tons per year to 5 million tons per year
• the expansion of the Khetri mine from 1 million tons per year to 3 million tons per year
• the development and re-opening of abandoned mines, which are expected to yield an additional 3.2 million tons of ore per year

HCL is seeking contractors, investors or a consortium to re-open the Rakha mines, which are part of the Indian Copper Complex in Jharkhand. The mines have been abandoned since 2001. HCL expects to produce 1.5 million tons of ore per year from these mines, which have an estimated reserve of 34 million tons. The mines are currently completely waterlogged, and all machinery and buildings had been disposed when the area was abandoned.

The contractor's mandate will re-open, operate and expand the mines. Initially, a contractor or investor will have to de-water the mines, equip the incline, install shaft ventilation and construct ore-handling facilities.

HCL is also working toward re-opening and making operational the copper mines of Hutti Copper and Gold Mines Limited (Chitradurga, Karnataka) and those owned by the state government of Karnataka. Shakeel Ahmed, the chairman and managing director of HCL, said, "A joint team of HCL and Hutti have completed inspection and technical evaluation of the copper mines, and we will initiate action to extract ore from the mines shortly."

The underground copper mines, also abandoned some years ago, can yield 2.62 million tons of ore for HCL.

Ahmed said that last month the Rajasthan government had granted HCL the prospecting license to explore supposed copper deposits in a 36-square-kilometer area at Baniwali Ki Dhani, in the state of Rajasthan. The region is 50 kilometers from the company's Khetri Copper Complex. Reports prepared by the Geological Survey of India (Kolkata) under the Indian government's Ministry of Mines indicate deposits of copper and other minerals in Baniwali Ki Dhani.

According to Ahmed, the strategy and investments to hike copper ore production was to tap the vast opportunities provided by the large gap in demand and supply of copper concentrate from domestic sources and smelting facilities with excess capacity. HCL is the only producer of copper ore in India, but its share of copper produced from captive mines is only 3% of the total refined copper used in India. The total production of copper ore in the past 10 years has remained at about 3 million tons per year. The copper produced from this was barely enough to meet 3% of the total demand for refined copper in the country.

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