State-run Hindustan Copper plans to invest Rs 3,677 crore to almost quadruple its existing copper ore production capacity to 12.41 million tonne per annum (mtpa) by 2016-17.
"The company has prepared an ambitious expansion plan to expand capacity of 3.21 million tonne to 12.41 million tonne at an estimated cost of Rs 3,677 crore, which would be funded from internal resources, fresh issue of shares and debt," the Mines Ministry's Outcome Budget for 2011-12 said.
The entire expansion would be completed by 2016-17 and in the meantime, the company would also take up greenfield projects for exploration and ore production, it said.
Hindustan Copper would spend a total of Rs 297 crore next fiscal through internal sources for part-funding expansion of the Khetri, Kolihan, Banwas and Singhbhum mines and reopening of the Rakha and Kenadadih mines.
The only copper ore producer in India, Hindustan Copper's existing capacity caters to about 3% of the requirement of optimum utilisation of installed capacity for smelting/refining of copper in the country.
"The gap in supply and demand provides a huge opportunity to the company to expand its operations in the mining of copper ore," the note said.
Hindustan Copper plans to invest a total of Rs 174 crore for expansion of the Khetri mines from 0.5 mtpa to 1 mtpa. In the Kolihan mines, it would invest Rs 275 crore for expanding the capacity to 1.5 mtpa from 0.5 mtpa now and Rs 91 crore to develop the Banwas mine with a capacity of 0.6 mtpa.
The Surda mine's capacity will be expanded to 0.9 mtpa from 0.42 mtpa now at a total cost of Rs 216 crore. Hindustan Copper would also invest Rs 347 crore to reopen the closed Rakha mine and Rs 87 crore for enhancing the capacity of the Kendadih mines to 0.21 mtpa.
The note said that Hindustan Copper has already applied for prospecting leases across the country for greenfield exploration and it proposes to explore and develop these mines in a joint venture with global mining majors.