New Document top_band
 
Business Standard

We are looking at gold exploration, plan to expand into base metals: Shakeel Ahmed

Interview with CMD, Hindustan Copper Ltd

Related News

Making profit for three years in a row has helped Ltd steadily . The sole copper producing company in the country, which announced its highest ever profit after tax of Rs 323 crore today, is now on the government’s disinvestment list. In a telephonic interview with Jyoti Mukul, Chairman and Managing Director says the renewed focus on core areas of mining and exploration has helped the company maintain profitability. Edited excerpts:

With the company now poised on road to profitability, what are the future expansion plans?
We are planning to invest Rs 3,435 crore to quadruple our mining capacity to 12.4 million tonnes (mt) by 2017. We have not commissioned any capacity since 1982. In fact, the company had to shut down four mines at Ghatsila in Jharkhand in the late 1980s since they were commercially unviable. We have already been awarded projects in , , and Chapri-Sideshwar.

How do you plan to fund this expansion?
It will be mainly through internal accruals. For the first time since 2004, we plan to raise Rs 208-250 crore through external commercial borrowings to bridge finance next year. But if our revenue improves further, we may not need to raise the funds. Earlier, we had resorted to foreign borrowings only to meet our working capital needs and not for capital expenditure.

How did the fall in copper prices affect the company’s performance this year?
Despite the current uncertain global economic scenario, with Chinese economy slowing down and the problem adversely impacting (London Metal Exchange) copper prices, our revenue has gone up. LME prices dropped by 14 per cent to $8,308 a tonne in the fourth quarter from $9,652 in the corresponding period of the previous year. Besides maintaining production volumes, a16 per cent depreciation in the rupee value helped us.

Does the company plan to diversify, considering that it is focused only on copper?
We are looking at gold exploration and plan to expand into base metals. Overall, our business focus has changed. From a vertically integrated company that was present in the entire value chain, we are now focussing on our core area of exploration and mining for growth and profitability. We realised that smelting and refining was not giving us much returns.

How is expenditure being kept under control?
We have optimised our manpower and reduced workforce from 5,440 employees in 2008-09 to 4,810 at present. Though our wage bill has gone up by about 58 per cent during the period, since our employees are earnings on an average 85 per cent more after two wage revisions, the company has restricted the increase by rightsizing the organisation and keeping additions restricted to only areas of skill deficiency.

The company has been talking about acquisitions, but so far nothing has happened on this front.

Hindustan Copper, in a consortium with SAIL (Steel Authority of India), Nalco (National Aluminium Co Ltd) and MECL (Mineral Exploration Corporation Ltd), has been shortlisted for exploration of copper and gold reserves at Badakshan, Zarkashan, Balkhab and Shaida in Afghanistan. The process of due diligence is going on. In India, we will shortly form a joint venture with Rajasthan State Mineral Development Corp (RSMDC) for exploration and exploitation of copper and some other metals. RSMDC will hold 51 per cent in the company and the remaining equity will be with us.

Read more on:   
|
|
|
|
|
|
|

Read More

We want to be one of the big media companies of the world: Punit Goenka

It hasn’t been a good year for Zee Entertainment Enterprises Ltd (ZEEL). The Rs 3,040-crore flagship of the Rs 5,647-crore Zee Group, India’s largest ...

Quick Links

Advertisement

Back to Top