Hind Copper Gets Nod To Close Down Mosaboni Mine

Hindustan Copper Ltd (HCL) has got approval from the union government to close down its Mosaboni mine in Ghatsila, Bihar from December 1, 1997.

The move will give a much-needed shot in the arm to the metal major as it will save HCL around Rs 25 crore from a total wage bill of Rs 200 crore per annum.

Mosaboni mine, that had gone 1230 m deep, was proving uneconomical for the company. It was awaiting clearance for closing it down from the government for a long time.

A decision was also taken by the board of directors on November 26, 1996 to take up the issue with the competent authorities.

 

This approval from the government, which is in line with the Chelliah Committee recommendation for closure of uneconomical mines, is a step towards competitiveness, said reliable sources.

According to analysts, though the company might not benefit from the closure immediately, it will improve its bottomline in subsequent years.

HCL has five mines at the Indian Copper Complex (ICC), three at Khetri Copper Complex (KCC) and one at Malanjkhand in Madhya Pradesh.

These mines, spread over three states of Rajasthan, Madhya Pradesh and Bihar, are covered under seven mining leases.

While KCC produced 12.32 lakh tonne of ore annually, ICC produced 10.22 lakh tonne and Malanjkhand produced 16.39 lakh tonne of ore.

During 1996-97, the crash of LME prices from June 1996 coupled with further reduction in customs duty in the central budget announced in July 1996, the company was faced with a severe fund crunch and huge cash loss.

HCL achieved sales of Rs 980.24 crore in the last fiscal as against Rs 1118.02 crore during 1995-96. Its loss before tax stood at Rs 130.62 crore in the last fiscal.

The company is also continuing its voluntary retirement scheme (VRS) to reduce its manpower and cost of production.

About 140 employees opted for VRS during 1996-97.