Chairman-cum-managing director of HCL S.C. Gupta at the non-ferrous industry seminar. Picture by Bhola Prasad

Jamshedpur, Dec. 15: As part of its revival strategy, public sector undertaking Hindustan Copper Limited has decided to outsource its closed mines to private players.

Chairman-cum-managing director of HCL S.C. Gupta today told The Telegraph that despite fall in copper prices in the international market, the company would continue with its expansion plans in Jharkhand.

Gupta, who was present at the national seminar on “Development in Non-Ferrous Industry”, said outsourcing of mines involves lesser risk.

Apart from reviving its closed mines, the company has applied for couple mining lease in Siddheshwar Chapri in the district.

“Giving the mines on contract involves less risk as no extra investment is required and our labourers would need not be involved with the job. Moreover, decision making becomes easy for us in case of crisis,” said Gupta.

Indian Resource Limited has a long term contract with HCL for operating its Surda mines.

Indian Resource Limited started its mining a year ago and is producing close to 4,500 tonnes of copper per annum for HCL. The Surda mine that was closed for four years due to some constraints has an annual capacity of 5,000 tonnes per annum. HCL used to produce close to 3,000 tonnes per annum through this mine.

Company officials said Indian Resource Limited has offered to increase the production capacity of the mine to 9,000 tonnes of copper per annum.

The effective mining by Indian Resource Limited has made HCL think of outsourcing rest of its closed mines to private parties on contract. However, officials declined to divulge the name of prospective companies that might take up the mining activity for HCL.

Gupta claimed that they have worked out the plan to first revive the closed Kendadih mine that is located in Ghatshila sub-division of the district.

The other closed mines of HCL are located at Bhandia, Banulopa, Rakhamines and Pathargora. All these mines were closed in the 90s when the prices of copper in international market came down drastically.

Gupta conceded that the present price of copper in the market is again pinching the copper producer.

“In July 2008, the price of copper in the market stood at US $8000 per tonne which has now come down to US $3000. However, there is demand of copper in Indian market which has come as a relief to us. We are trying to reduce our cost of production by using better technology. Some of them has been implemented at our smelter plant in Ghatshila,” added Gupta.

This year HCL has invested close to Rs 65 crore for reviving its mines and smelter plant at Ghatshila. Capacity of the smelter plant that stood at 16,500 tonnes has been increased to 21,000 tonnes.

According to Gupta, the proposed expansion is important for the company which is looking to meet its target for the year 2012. The strategy is a part of it.

“We are looking to double our metal production to 60,000 tonnes per annum. At present it stands at 30,000 tonnes per annum,” he added.