Hindustan Copper Plans A Sixfold Increase In Capacity By 2024
State-run Hindustan Copper Ltd. is planning a sixfold increase in its production capacity over the next six years.
The company will spend Rs 5,500 crore to expand its capacity to 20 million tonnes per annum by 2023-24 from 4 million tonnes, Chairman and Managing Director Santosh Kumar said at a press meet in New Delhi on Thursday.
This comes after the Cabinet Committee on Economic Affairs yesterday approved the issuance of fresh equity of up to 15 percent to Hindustan Copper. This will help the copper miner to raise around Rs 901 crore. The proceeds will be used to fund the company’s expansion and capital expenditure plans, it had said in a statement. The mini ratna firm’s capital expenditure stood at Rs 600 crore in the previous financial year.
Copper ore production will be around 10 million tonnes over the next two years, Kumar said. “The capex plan for the ongoing financial year is Rs 900 crore.”
Hindustan Copper now caters to 5 percent of the domestic demand. It aims to meet 30 percent of domestic demand as it looks to expand capacity.
The expansion plan will also be supported by exploration activities. “We have made a plan for exploring about 40,000 drilling meterage per annum in the coming three months,” he said. “This will help in increasing the life of copper mines and converting resources to reserves.”
Kumar said, “I have identified areas for exploration in three belts—Khetri Belt (Rajasthan), Singhbhum Belt (Jharkhand), Malanjkhand (Madhya Pradesh).”
In terms of expenditure, Kumar said, it will be around Rs 40 crore per annum for the coming three years. “The total plan for exploration in three years is Rs 175 crore.”
Hindustan Copper’s issuance of 13.87 crore fresh equity shares, to the extent of 15 percent, will bring down the government’s stake in the public sector undertaking to 66.13 percent, an official statement said. The government now holds 76.05 percent stake in the PSU.
The company will use the proceeds of qualified institutional placement to meet its expansion or capex plan, it had said in a statement.
“The QIP will take three months for the first tranche to dilute,” Kumar said. “It may be up to 5 percent. I have got approval for issuance of fresh equity of up to 15 percent but that does not mean I will go for 15 percent. It will depend on my requirement.”