Global
India
Hindustan on expansion drive
Hindustan Copper, a government-controlled company, is India’s
only copper miner. It is in the initial stages of a major expansion
programme, at a cost of USD800-million.
Currently, Hindustan Copper produces around 40 000 tonnes (t)
of copper per year. The company plans to increase this to about 200
000t by 2025.
Construction is underway at a major new underground mine
in the state of Madhya Pradesh. Yet to come are expansions at its
operations in the states of Jharkhand and Rajasthan.
Hindustan Copper’s production of 40 000t is only a small
proportion of the 650 000t that India used last year domestically
(e.g., in the electrical, construction and transport industries).
Imports, mainly from other Asian countries, make up the main
part of the market. Imports comprise both copper metal and
copper concentrates, with the latter refined in India to produce
metal.
What is the outlook for imports? Consider the following
possible scenario (figures are in tonnes):
The projected increase in annual domestic consumption, from
650 000t to one million tonnes, represents an increase of 50%. Such
an increase is commonly expected by analysts.
But even with the strong increase in production by Hindustan
Copper, imports increase strongly too (from 610 000t to
800 000t per year).
These illustrate India’s dependence on imports. This dependence
may prove to be expensive, on two grounds. The first relates to
future copper prices: many analysts see a steady increase in coming
years, reflecting falling grades and only a limited number of major
projects on the drawing board globally.
The second relates to a problem faced by Vedanta Resources, one
of the country’s two refiners. Last year, its refinery in the southern
state of Tamil Nadu was closed by the state government on
environmental grounds. The company has since been locked in legal
battles with the state government, with these still to be resolved.
As a result of the refinery’s closure, imports of copper metal
have increased strongly in the past year, at the expense of cheaper
concentrate imports. This will continue if the conflict is not
resolved.
Copper consumption per capita in India is low by world
standards – for example, it is less than 15% of that in China. A
low-cost copper industry is important for India’s overall economic
development. This will not be achieved while local mining remains
limited and local refining disrupted. (Source: Melbourne Resource
Monitor).
www.miningmirror.co.za
JUNE 2019 MINING MIRROR [13]
JUNE 2019 MINING MIRROR [13]