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HCL outsources mining, looks at Afghan copper deposits
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12th August 2011
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KOLKATA (miningweekly.com) - India’s sole integrated copper miner-refiner, Hindustan Copper Limited (HCL) is planning to outsource ore extraction from the 25-million ton Banwas deposits, in the central province of Rajasthan, to mining contractor Byrnecut Mining Australia, on a risk-sharing model.

HCL was furthermore preparing to submit a bid to develop copper reserves in Afghanistan where deposits in Aynak Valley, 20 km from Kabul, have been valued at $88-billion.

These were part of the company’s initiatives to increase copper ore production to 12.40-million tons a year, from the current 3.66-million tons a year, at a compounded annual growth rate (CAGR) of 21.35%, according to the 'Copper Market Survey' conducted by the Indian Bureau of Mines (IBM).

As part of its other greenfield domestic expansion, HCL has applied for 20 new mining concessions for the Baniwali Ki Dhani and Dhani Basri areas in the central Indian province of Rajasthan, the Sitalapani and Jatta blocks in Madhya Pradesh province and the Tamrapahar-Dhaboni deposits in the eastern province of Jharkhand.

“HCL is the only company in the country producing copper ore from mines in Rajasthan, Madhya Pradesh and Jharkhand. As per the company’s estimates, the total copper mineralization area in India is spread across 60 000 km2 out of which only 20 000 km2 has been explored to date and the balance is still awaiting to be explored,” the 'Copper Market Survey', IBM’s first metal market study, said.

“It is presumed that exploration of the balance area will ease the pressure on indigenous supplies and a comprehensive plan is needed for re-exploration of existing deposits and exploration of virgin areas,” the survey said.

Apart from integrated HCL, which produces copper cathodes from own-mined ore, other producers, Sterlite Industries and Birla Copper produce copper cathodes from imported copper concentrates. HCL's share in total cathode production from its own ore is very small at about 9% with major production coming from Birla Copper at 64% and Sterlite Industries at 26%.

Against this current production configuration backdrop, according to the survey, production of copper in 2011 is estimated at 637 000 t and forecast to increase to 1.08-million tons by 2017 at a CAGR of 9.35%.

However, there would be severe limitations to increasing copper production from integrated operations given the geological profile of copper ore reserves in India. The total resources of copper ore as per the 'National Mineral Inventory' of 2005, was pegged at 1 394.42-million ton.

However grade-wise, only 28.03-million tons, or 2%, comprised ore containing 1.85% or more copper content, 621.98-million tons, or 44.61%, comprised copper content of 1% to below 1.85%, 604.94-million tons comprised metal content of above 0.5% but below 1%, and 139.92-million tons contained below 0.5% copper content, the survey said.

The average percentage of copper content in the ore is very low and in 2009 the average metal content in copper ore mined in India was 0.92%, forcing the country to import sizeable quantities of copper concentrates to meet domestic smelters' demand. The import of copper ores and concentrates, mainly from Chile and Australia, during 2009 was 2.26-million ton compared to 1.91-million tons in 2008, an increase of 18%, the survey said.

Edited by: Esmarie Swanepoel

 

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Picture by: Bloomberg