State-owned Hindustan Copper Ltd, which has expressed interest in bidding for the development of mines in Afghanistan, is also embarking on an expansion plan to increase its mine capacity from 3.2 million tonnes to 12 million tonnes per annum in this financial year, which started in April.
The monopoly producer of the metal ore is set to invest around $985 million over the next five years in its expansion drive. Chairman Shakeel Ahmed has also announced a keen interest in overseas acquisition of mines and copper deposits in Chile, Peru, Mongolia and Namibia. Another state-owned firm, the National Aluminium Corporation, which has identified a copper mine in Namibia as part of its latest international raw material drive, is to team up with Hindustan Copper for the Namibian venture. Hindustan Copper operates copper mines with indicated reserves of just under 6.5 million tonnes of copper metal. Its captive mines meet 60% of its copper concentrate requirement, while the firm imports the rest. The company has sought 10 new mining licenses from the government, and plans to increase its ore output by 40% by 2012. The firm is also keen to explore greenfield sites for copper and associated minerals in the country. With the consumption of copper in India growing at a hefty 7%-8%, the government has installed smelting and refining capacity of around 1 million tonnes in the country, which is almost double the country's current annual consumption. Plans are afoot to meet the demand. Though there is a huge demand of copper concentrate in India, the current mine production meets only 3% of the installed processing capacity in the country. There exists an urgent need to augment mine production by exploiting indigenous resources, government officials have said. Last month, the Indian government approved a decision to sell a 10% stake in Hindustan Copper. The money raised by the Kolkata-headquartered public sector undertaking would be used towards capital expenses. The Indian government currently holds 99.59% shares in Hindustan Copper. Both are expected to share the proceeds equally. The company has negligible debt on its books. In India, with power, telecom and housing constituting 65% of the country's copper demand, an increase in activity in these sectors is driving a corresponding growth in demand. The domestic market for copper had tested a one-month high at the end of June, though the start of July witnessed flat trading in copper futures on the Multi Commodity Exchange. Lack of fresh triggers has been cited as the cause by traders. They added that spot prices for the metal were seen trading down in Mumbai on Thursday, July 15. At the end of last month though, copper had closed by marking the biggest weekly gain in over four months.
As for Hindustan Copper's designs on Afghanistan, what has brought on the excitement is that Afghanistan has announced ambitious plans to develop its $1 trillion in resources mineral potential, with a 200,000 tonnes per year copper mine producing within about another three years, to kick-start the process. ``Afghanistan is likely to invite bids to develop mines in the country. We would like to bid for mines in the country, particularly copper,'' chairman Shakeel Ahmed had said.