Hindustan Copper to diversify into downstream products space

Company is into advanced negotiations with a closely held firm, will buy more than 26%

State-owned Hindustan Copper Ltd (HCL) is set to diversify into downstream products space, a clear step to move ahead from being commodity producer to a products company with an aim to improve its bottomline.

The PSU will buyout a minority stake in an existing company, which is already into the business, to take a pie in the value-added products market that is estimated at 100,000 tonne per annum in India, a top company official said.

"We have initiated steps to manufacture downstream products. We are into advanced negotiations with a closely held company who already has huge expertise in copper products business," Hindustan Copper Chairman and Managing Director K D Diwan said here today.

"We will buy more than 26% but less than 50% in the closely held firm. I will not able to disclose in details unless a final agreement is signed. The firm already has facilities for downstream products for industrial use," he said.

"HCL plans to shift 10,000 tonne of copper rods out of total production of 35,000 tonne to begin with from its Taloja plant in Maharashtra. If the venture succeeds, then we plan to increase the supply to 20,000 tonne in the next three years," a company official said.

The firm will try to capture value-added products market including products for high speed railways also, Diwan said.

Beside this, Hindustan Copper has also decided to foray into recovery of precious metals and would invest Rs 30 crore for the technology. The company will form a JV with Chattisgarh Mineral Development Corporation for exploration of mines in Chattisgarh.

Diwan said company has planned expansion of eight mines including Malankhand and the capex over the next five years would be in excess of Rs 3500 crore and of this around Rs 2000 crore would be in mining related investment.

In FY'15, the capex would be Rs 522 crore.

Meanwhile, speaking about its closure of Surda copper mines in Jharkhand, Diwan said company's annual revenue from them is Rs 70 crore.