India's Sole Integrated Copper Poducer Seeks Developer for Chapri-Siddeswar Copper Mines

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hindustan Copper Limited (BSE:513599) (HCL) (Kolkata, West Bengal), India's sole integrated copper producer, is seeking a developer or a consortium of developers to produce 1.5 million tons per year of copper ore from the Chapri-Siddeswar reserves in the Singhbhum district of the eastern Indian state of Jharkhand.

The Chapri-Siddeswar copper reserve is near HCL's existing Indian Copper Complex in Ghatsila, Jharkhand, and a preliminary geological survey indicates mineable reserves of 35 million tons with an average grade of 1.65% copper, available through underground mining.

HCL has four operating units: the Khetri Copper Complex (Khetri Nagar, Rajasthan); the Indian Copper Complex; the Malanjkhand Copper Project (Madhya Pradesh) and the Taloja Copper Project (Maharasthra).

Officials at HCL said that the development and extraction of ore from the Chapri-Siddeswar reserves will be outsourced through a model that was adopted when the abandoned Surda copper mines, also in Jharkhand, were restarted. The development and mining at Surda was outsourced to India Resources Limited (ASX:IRL) (West Perth, Australia), which has brought the mine up to its current production of 500 tons of ore per month. Releasing these projects to contracted companies reduces the risks for HCL without any additional capital expenditure for the company, officials said.

As a pre-condition for the selection of a developer or a consortium of developers, HCL has stipulated that the developer should have experience of constructing an underground vertical shaft with a minimum depth of 240 meters, work at rate of at least 50 meters of mine shaft per month and completed 8,000 meters of mine development in a single year.

The current outsourced development plan for Chapri-Siddeswar is the second initiative of HCL after it announced in September that the company was seeking, contractors, developers or investors as a consortium to re-open the Rakha mines that are part of the Indian Copper Complex and were abandoned in 2001. HCL expects to produce 1.5 million tons of ore from these mines, which has an estimated reserve of 33.99 million tons.

The development of Chapri-Siddeswar and Rakha are part of HCL's corporate strategy to increase production from its mines from current levels of 3.15 million tons per year to 12.5 million tons per year over the next five years.

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