In an attempt to reduce India’s dependence on imported copper concentrate, Hindustan Copper Limited (HCL) got the government’s nod to develop a 5 million metric ton per year underground copper mine at Malanjkhand Copper Project in the central Indian state of Madhya Pradesh.
According to a report published in Business Line, Hindustan Copper Ltd is likely to get a Rs 6.8 billion ($136 million) contract to install an ore beneficiation unit and a complete ore handling facility for its underground mine project.
According to the report, this “work was left out after mine erection, development and construction job of the Malanjkhand underground copper mine project was allocated” a few months ago.
A consortium led by IVRCL Infrastructures & Projects bagged the largest contract of Rs 11.8 billion ($235.2 million) to expand the Malanjkhand mines. The other members of the IVRCL-led consortium are MCCL of Ukraine, Teknomin Constructions Limited Vijaywada and Davy Markham of the UK.
The Malanjkhand copper deposit is the single-largest copper deposit in India with nearly 70 percent of the country’s reserves and contributing around 80 percent to HCL’s total copper production.
There are three main players in the Indian copper sector — Sterlite Industries, Hindalco, and Hindustan Copper. State-owned Hindustan Copper is a vertically integrated producer, while Hindalco and Sterlite Industries are mainly custom smelters. Hindalco and Sterlite account for more than 80 percent of India’s total copper production.
Copper is used in water pipelines, houses and buildings, electrical motors, power lines, electrical appliances, health care, environment-related industries, computers, communication devices, and in general, the industries that are shaping the future.
India is self-sufficient in copper ore resources. During early 1920s, the domestic demand of copper and its alloys was met through domestic production as well as imports, but during the last two years or so, India is exporting some of its surplus copper.
Copper, regarded as an indicator of economic growth, remained volatile in 2011. After hitting an all-time high of $10,190 a ton, supported by supply-side worries, the price slipped to a low of $6,635 a ton on account of global economic concerns and its impact on consumption growth of industrial metals.
India, Russia, China are some of the leading consumers of copper, with tremendous growth in construction and power. But, China is the single-largest consumer with about 25 percent of the total global demand of 80.5 million tons. However, globally, copper consumption growth slowed to 2.8 percent in 2011 as a result of weak demand in the EU and the US.
China has grown at an annual rate of 9.9 percent between 1980 and 2010. Most forecasts do not have China slowing down anytime soon; the IMF predicts China’s economy will expand at an annual rate of 9.7 percent over the next 5 years.
Copper consumption is also likely to rise in India on demand from auto and power sectors. According to the International Energy Agency, India’s power production needs to rise by 15-20 percent annually and to meet that, India needs to invest $1.25 trillion in energy infrastructure by 2030.