Revamp Hindustan Copper Ltd: SIEMA

In an effort to help the small scale engineering and foundry units in the region by keeping the spiralling copper prices under check, the Southern India Engineering Manufacturers' Association (SIEMA) has demanded revamp of the public sector Hindustan Copper Ltd.

In a representation to Union finance minster P Chidambaram, the association said the capacity of Hindustan Copper was being under-utilised. While the company has a total capacity to produce around 1.50 lakh tonnes of copper per year, it is manufacturing only up to about 20-30 per cent of its capacity.

Though its mines had a lower percentage of ore concentrates, the company was running profitably even when the basic copper price was around Rs 165 per kg, it pointed out.

C R Shanmughasundaram, vice-president, SIEMA, said Hindustan Copper had more than doubled the basic rate (duty and taxes were extra) of copper rod in the last one year - from Rs 192 per kg in June 2005 to Rs 408 per kg in May 2006. During this month, copper rate has been revised thrice - from Rs 374 in the first week to Rs 408 in the third week.

He said while commodities trading in copper had pushed up prices by 100 per cent in the past 10 months, the volume of physical delivery was a mere 2 per cent of the traded volume in the commodities market.

Nearly 95 per cent of India's copper requirement was met through imports.

Moreover, the customs duty on copper concentrates, in this year's Budget, was reduced from 5 per cent to 2 per cent. The duty on semi-finished rods and products was also cut to 7.5 per cent from 10 per cent, he added.

"However, the domestic smelters were pricing their products in India at par with international price based on 7.5 per cent import duty thereby enjoying the additional profit," he said in the statement.

Moreover, the Indian producers acting as a cartel fixed a provisional price for copper and fixed a final price on the basis of the monthly average LME (London Metal Exchange) price at the end of the month and issued final invoice to local industries keeping them in the dark about the price, he added.