Hindustan Copper is in talks with the Karnataka-based Hutti Gold Mines to form a joint venture for reviving copper mining activities, which are abandoned by the state PSU almost a decade ago.
"With rising copper prices, Hindustan Copper Ltd (HCL) has given a proposal to Hutti Gold Mines to revive copper mining activities in a joint venture. The state PSU used to earlier supply copper concentrates to Hindustan Copper," a government official said.
The proposal from HCL for resuming copper mining at Chitradurga reserves of the Hutti Gold Mines in Karnataka, where mining was abandoned in 2001, comes at a time when the state-owned firm is in process of augmenting production and revive operations. The Chitradurga mines is estimated to house about 7.8 million tonnes of copper ore.
Hutti Gold Mines abandoned copper mining, as it focussed more on producing gold, its core business. Also it lacked sophisticated mining equipment and monetary resources to continue the activity at Chitradurga.
Analysts said HCL is working towards diversifying its portfolio and expanding operations, before its 20 per cent share sale hits the capital market in the November-December this year.
Hindustan Copper, the sole government-run producer of the metal, is seeking controlling stake in the joint venture, the official said.
Copper prices were hovering in the range of around USD 800-900 a tonne in 2001, when copper mining was abandoned by Hutti Gold Mines. At present, copper prices are at around USD 8,000 a tonne. Since May this year, prices have surged by about $2,500 a tonne.
"Hindustan Copper is preparing the draft red herring prospectus for the FPO, which is expected to be filed with market regulator Sebi by the September-end or early next month. It is hopeful of forming the JV before the FPO," the official added.
The company could not be contacted for comments.
HCL had earlier said it would embark on increasing its mining capacity from the present 3.2 million tonne annually to 12 million tonne in the next five-six years, at a capital investment of Rs 4,580 crore.
The company is also eyeing copper assets in countries like Chile and Namibia, Afghanistan.
