Hindustan Copper (HCL), the country’s sole copper miner, is seeking to increase its borrowing limit to fuel expansion plans at a time when global copper prices have started climbing up. In a filing with the BSE, the company said a board meeting has been scheduled on November 10, where a proposal to increase the borrowing limit from “consortium and other banks” will be taken up. Although HCL’s newly-appointed chairman and managing director, Santosh Sharma, didn’t divulge further details or the need to increase the borrowing limit, company sources said a proposal might be placed to raise the long-term capital borrowing limit as well as revise the present working capital borrowing limit. As on March 31, 2017, the company’s total debt stood at Rs 469.88 crore, with long-term borrowing accounting for 44 per cent of the total borrowing at Rs 205 crore. The move comes against the backdrop of HCL planning to float tenders to reopen operations in the Rakha underground mine (UG mine) and go for another greenfield project in Chapri-Sideshwar mine – all in Jharkhand. “We are preparing the tenders now to select mine developer and operator (MDO). When operational, these mines will increase our ore production capacity by another 3 million tonne (mt),” Sharma said. However, he didn’t mention the quantum of investment required for these two projects. Typically, a 5-mt underground copper mine requires Rs 1,400 crore of investment. The Rakha mine, which originally was founded by a British company in 1900, went in HCL’s kitty after nationalisation.
Subsequently, as copper prices nose-dived, HCL closed the mine in 1999.The Chapri-Sideshwar UG mine project as well as the Rakha mine will be crucial to meet the 12.41-mt production target the company has set for itself by 2022. Besides these projects, HCL is also more than doubling its existing 2-mt capacity in Malanjkhand opencast mine by developing an UG mine in the same area. It will also be tripling the existing 0.5-mt capacity in the Kolihan mine and double 0.5-mt production in the Khetri UG mine. Other projects like the reopening of the Kendadih UG mine and the development of a new UG mine in Banwas are also under consideration. The company is expected to cough up around $ 700 million to up the ore production from the current 3.4 mt to 12.41 mt in the next five years. Global copper prices are showing encouraging signs with the prices in the London Metal Exchange shooting up by 30 per cent in the past six months. On November 7, prices stood at $6,902 a tonne.