Hindalco to double copper capacity

Hindalco, the Aditya Birla group company, has chalked out an expansion plan to double its copper smelting capacity to 5 lakh tonne per annum in the next two years. The company has announced a 2.5 lakh tonne brownfield expansion at its existing copper unit in Dahej, Gujarat.

The company has earmarked an investment of Rs 1,200 crore for the proposed expansion.

Debu Bhattacharya, managing director, Hindalco, said, "The 2.5 lakh tonne expansion plan at Birla copper will make the single largest copper smelter in world at one unit. We will hope to complete the expansion within the next 24 months." The expansion project will be funded mainly through internal accruals, he added.

Hindalco recently completed a capacity expansion programme, which has increased its capacity to 250,000 tonne.

"Although the treatment and refining charges have been on a downward trend, we expect that copper demand will be firm in the next few years and therefore we are raising capacity to meet the demand," Bhattacharya said.

Global copper prices have almost doubled on the London Metal Exchange, in the last one year, he added. Meanwhile, the company has also outlined organic and inorganic growth in its aluminium division.

Hindalco executives however declined to comment on any growth plans in the aluminium division. Hindalco has recently acquired a 55 per cent majority stake in the Utkal alumina refinery project.

The company has completed the expansion of its aluminium smelter capacity from 250,000 tonne to 345,000 tonne. It is to be raised further to 360,000 tonne.

Raises $50 m: Hindalco has raised $50 million through the external commercial borrowing (ECB) route, senior company executives told Business Standard.

"We have raised $50 million of ECB's on April 1 to augment our expansion plans lined up in the next two years," senior officials said. The loan which is for a period of five years, was raised at the rate of LIBOR plus 60 basis points, he added. Hindalco has total reserves of Rs 6,765 crore as on March 31, 2004, of which Rs 1,600 crore were liquid reserves, the company said.