Hindustan Copper appoints advisers for proposed Chile mine acquisition: CMD

The state-run miner has appointed transaction advisers for its proposed acquisition of four copper mines in Chile, with due diligence under way amid regulatory processes

State-run Hindustan Copper Ltd (Hind Copper) has appointed transaction advisers for its proposed acquisition of four copper mines in Chile.

 

The company is progressing with the due diligence process, though it expects the overall exercise to take time, given regulatory requirements in both countries.

 

“Transaction advisors have been put in place. They are studying the data. There are a lot of regulatory things not only on this side but on that side as well. And, you know how in the mining industry, the regulatory approach takes place everywhere. So, this thing will definitely take time but we are moving in the positive direction,” HCL chairman and managing director Anupam Misra told reporters on the sidelines of a Federation of Indian Chambers of Commerce and Industry (Ficci) event on Friday.

 

Asked whether the company expects to complete the acquisition in the current financial year, Misra said the process was still at an early stage.

 

“Even if we reach the first milestone of getting any kind of agreement, that will be the first milestone or achievement. Because taking over a mine is a very big thing. We see it happening in two to three years down the line,” he said.

 

Responding to a question on the outlook for the copper market, Misra said a supply deficit continued to support the industry. “There is always a gap between demand and supply and not only here but everywhere. We are a very small contributor to the refinery sector. Just 5 per cent of the concentrate goes from us. So, for us enough demand is there and as far as London Metal Exchange (LME) is there, that is supporting us. So, we are in a good position,” he said.

 

On operational challenges facing the copper mining industry, Misra said the biggest logistics issue lies within mining operations because of the low metal content in copper ore.

 

“The logistics (inbound and outbound logistics) within the operations itself is a challenge. Because we have to handle 99 per cent of the waste, the tailings management is a much bigger challenge from the sustainability point of view. So there are enough logistics challenges. And yes, technology can help us do this,” he said.

 

Misra also reiterated Hindustan Copper's expansion plans, saying the company currently has mining capacity of around 4 million tonnes and aims to increase it to 12.2 million tonnes, with higher long-term ambitions subject to achieving intermediate milestones.

 

Speaking at the same event, former Niti Aayog Member V K Saraswat said India's logistics cost for the mining and metals sector may be closer to 8 percent of Gross Domestic Product (GDP) than the widely cited 14 percent figure, though the sector’s underlying bottlenecks remain unchanged.

 

He said bulk freight bottlenecks, mining-specific evacuation gaps are still real and costly. Saraswat identified two structural weaknesses continuing to hold back the sector — inadequate first-mile and last-mile connectivity from mines situated in remote, forested or mountainous terrain, and continued over-dependence on road haulage, which he said could cost two to three times more per tonne-kilometre than rail for bulk commodities.