Ahead of FPO, HCL gears up to expand mine capacity

Ahead of its about Rs 4,000-crore FPO, which is likely this month, state-owned Hindustan Copper is on an expansion drive and will more than double the capacity of its Madhya Pradesh mine to 5 million tonnes.

"Hindustan Copper Ltd proposes to engage reputed contractors for development of Malanjkhand underground mine for a production capacity of five million tonne per annum (MTPA)," the company said.

It has invited an expression of interest to develop the mine, having a current capacity of two MTPA, which closes on December 15, it said.

The expansion of Malanjkhand mine is a part of the company's plan to enhance its production capacity from current level of 3.15 MT per annum to 12.5 MT per annum over the next five to seven years.

Besides Malanjkhand mines, the company will also augment the capacity of Khetri copper complex mines in Rajasthan from one MTPA to three MTPA.

It will also reopen its two closed Copper Mines in Jharkhand including Kendadih in Singhbhum by 2013. Mining operations, as per a company official, were closed as the same had become unviable due to low LME (London Metal Exchange) price then.

It is also set to reopen another closed copper mine -Rakha in Jharkhand, with estimated coal reserves of about 34 million tonnes. The operations there were suspended in July 2001, after it was waterlogged.

Besides re-opening of closed mines, the PSU also plans development of new mines. It has been recently granted prospecting license for Baniwali-Ki-Dhani (copper) mine in Sikar district of Rajasthan.

Meanwhile, the company has filed draft prospectus with the Securities and Exchange Board of India in September for its proposed 20 per cent share sale programme.

The government will sell 10 per cent of its stake in its under the follow-on public offering (FPO), while the company will issue fresh equity in the same proportion.

Shares accruing to 0.41 per cent stake in the company are already being publicly traded. The proposed FPO will see the government's equity holding coming down to 81.45 per cent from 99.59 per cent at present.

In July, the copper producer appointed UBS Securities, ICICI Securities, SBI Capital, Kotak Mahindra and Enam Securities as the managers of the issue.

The company is also eyeing copper assets in countries like Chile, Namibia and Afghanistan and has forged an alliance with another mining PSU, Nalco, for overseas mining projects.