Hind Copper eyes higher credit limit for expansion

Hindustan Copper (HCL), the country’s sole copper miner, is seeking to increase its borrowing limit to fuel expansion plans at a time when global copper prices have started climbing up.

In a filing with the BSE, the company said a board meeting has been scheduled on November 10, where a proposal to increase the borrowing limit from “consortium and other banks” will be taken up. Although HCL’s newlyappointed chairman and managing director, Santosh Sharma, didn’t divulge further details or the need to increase the borrowing limit, company sources said a proposal might be placed to raise the long-term capital borrowing limit as well as revise the present working capital borrowing limit.

As on March 31, 2017, the company’s total debt stood at ~469.88 crore, with long-term borrowing accounting for 44 per cent of the total borrowing at ~205 crore.

The move comes against the backdrop of HCL planning to float tenders to reopen operations in the Rakha underground mine (UG mine) and go for another greenfield project in Chapri-Sideshwar mine – all in Jharkhand.

“We are preparing the tenders now to select mine developer and operator (MDO). When operational, these mines will increase our ore production capacity by another 3 million tonne (mt),” Sharma said.

However, he didn’t mention the quantum of investment required for these two projects. Typically, a 5-mt underground copper mine requires ~1,400 crore of investment.

The Rakha mine, which originally was founded by a British company in 1900, went in HCL’s kitty after nationalisation. Subsequently, as copper prices nose-dived, HCL closed the mine in 1999.