Nissan Copper eyes mine abroad

Mumbai-based copper tube manufacturer Nissan Copper is planning backward integration with an estimated capital expenditure of Rs 800 crore.

The company has identified a mine in Tasmania to source copper concentrate for its proposed smelter at Silvassa in Gujarat and approached the local government for approval.

"We are looking at a mine which can feed our smelter for at least 20 years with an estimated output of 70,000-80,000 tonnes of concentrate. We are in talks with the Tasmanian government to allocate a copper concentrate mine and hope the proposal would be cleared very soon. Once the copper concentrate supply is assured, work on the Silvassa smelter would begin," said Ratan Mardia, managing director.

For the Tasmanian mine, the company was also looking for a joint venture partner and was in talks with two local mines, Mardia said, without divulging the names of possible joint venture partners. "We are planning to start mining in Tasmania and begin the Silvassa plant by 2010," he said.

Additionally, the company is planning to set up another tubes manufacturing facility in Silvassa with a capex of about Rs 180 crore.

The proposed units of Nissan Copper are likely to be partly (about 15 per cent) funded by internal accruals. But, a major chunk (about 85 per cent) is proposed to be financed through Foreign Currency Convertible Bonds (FCCBs), which the company is planning to issue next year.

Nissan Copper is, currently, manufacturing tubes for diverse applications with a capacity of 2,400 tonnes per annum. But once the Silvassa smelter goes onstream, the total capacity would go up to 6,000 tonnes.

With copper tube applications in households growing at a rate of about 20 per cent annually, the company's proposed expansion-cum-backward integration makes sense.

At presnt, about 70 per cent of the total tubes produced by the company is supplied to other equipment manufacturers.