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    HCL gets govt nod for mining expansion

    Synopsis

    To meet the company’s funding needs for these projects, govt has allowed it to issue some 13,87,82,700 fresh equity shares.

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    Total capital outlay for the expansion projects is Rs 5,500 crore. (Representative Image)
    KOLKATA: State-owned Hindustan Copper Ltd (HCL) has received government approval to increase its mine expansion plans to 20 million tonne from the earlier planned level of 12.4 million tonne at an investment of Rs 5,500 crore in the next six years.

    “Our mining capacity will be increased by around six times from its present production capacity in next six years. Total capital outlay of the above expansion projects is Rs 5,500 crore,” HCL chairman Santosh Sharma told shareholders during its 51st annual general meeting.

    To meet the company’s funding needs for these projects, Cabinet Committee on Economic Affairs, has already given its approval to HCL for issuing some 13,87,82,700 fresh equity shares to the extent of 15% of paid up equity capital of face value of Rs 5 each through the Qualified Institutional Placement (QIP) route. HCL will use the proceeds of QIP to meet its capex plan, the official said.

    He said about half of the work on the company’s flagship project, Malanjkhand underground mine of annual capacity of 50 lakh tonne has been completed. Plans have been firmed up to commence ore production from the underground mine in the coming fiscal year. Similarly, tenders have been issued for construction and operation of Chapri- Sidheswar, a new mine at Ghatsila with an annual production capacity of 1.5 million tonne. HCL has also earmarked Rs 200 crore has to undertake in-depth exploration across the company’s mining lease areas, he added.

    While investment in upcoming infrastructure projects and increased government spend on housing, rural and railway electrification, is tipped to raise rate of growth of copper consumption to around 6-7% in 2018, the domestic copper industry is facing a major challenge due to a surge in imports of refined copper from the countries we have Free Trade Agreements. The imports have increased to around 2.5 lakh tonne in 2017-18 or roughly around a third of the domestic demand from 65,000 tonne in the 2010-11.

    While refined copper production during 2017-18 was at 8.43 lakh tonne as compared to 7.98 lakh tonne in FY 2016-17 the consumption of refined copper was around 6.6 lakh tonne in 2017-18 compared to 6.5 lakh tonne in 2016-17.


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