3 Binani mines to go onstream

Binani Industries (BIL) is planning to start commercial production on its three copper and zinc mines allocated by the Gujarat and Rajasthan governments in the next six months with a proposed expenditure of Rs 200 crore.

The projects with an overall production capacity of 1,00,000 tonne of copper, zinc and lead concentrates are proposed to be funded partly (43 per cent) through internal accruals.

The company has spent Rs 8-10 crore and requires Rs 30-35 crore to start commercial production.

The trial run has already begun.

Out of the 10 million tonne of metal deposits, the zinc content is estimated at 8 per cent, while lead and copper content is projected at 3 per cent and 1.5 per cent respectively.

The three mines exist in Dearie and Basantgarh in Rajasthan and Ambaji in Gujarat where the respective state governments declared exploration unviable and projects were written off after initial drillings 25 years ago.

The firm, second largest zinc producer in India after Hindustan Zinc Limited, had started work in the three mines a few months ago.

"Although we have spent a meagre sum on these projects, we are hopeful of meeting our production deadline," said Ibrahim Ali, advisor, Binani Industries and managing director, RBG Minerals Industries at the sidelines of a seminar on "Accelerating the Momentum in Indian Mining Sector".

It was organised by Minerals & Metals Review (MMR) Events in association with IIM, Mumbai Chapter here. While commenting on the viability of mines, Ali said that anything is viable today.

"The Rajasthan and Gujarat governments told us to go ahead with our own investments with their 10 per cent and 25 per cent stake in the proposition for the initial drillings they did. The remaining 65 per cent will be held by BIL," Ali said.

BIL is planning to supply zinc concentrates to its own facility in Binanipuram, Kerala, while copper and lead concentrates would be supplied to private smelters and refiners. Copper concentrates would probably be supplied to Indo Gulf in Dahej or Sterlite Industries in Tuticorin. This proposition is yet to be finalised, he added.

"The job was not easy as we sought bank guarantee for the project. Therefore, we went to the US government, which funded $500,000 through SRK Consultancy, a US-based consultancy firm," Ali said.

The company prepared another feasibility report and declared the project as 'robust', we got a bank guarantee of 90 per cent of the investment," Ali added.