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Sharad Mistry
Mumbai, Jan 15: MMTC Ltd and SWIL Ltd have received clearance from the Reserve Bank of India to hedge their commodity-related risks on international commodity exchanges (comexes).
Birla Copper was the first company to receive RBI nod to hedge copper- related risks on the London Metal Exchange in November, 1998.
Birla Copper was expected to kick off the country's first international hedging on the LME this month aided by Standard Chartered Bank, its authorised dealer. But it is learnt that it may take some more time to begin hedging its requirements of copper concentrates that it needs to import.
MMTC Ltd is a state-owned trading company engaged in importing a whole range of metals, including non-ferrous and others like silicon, magnesium and antimony.
Last year, the RBI had permitted MMTC to import and trade in gold along with 14 other state-owned entities including public/private sector banks. However, the latest permission is only for base metals and does not cover gold.
During the current fiscalending March, 1999, MMTC has a target of importing around 36,000 mt of metals, of which around 25,000 mt is said to have been imported already, leaving a sizeable gap of over 10,000 mt to be imported over the next 30 months.
Of the metals imported, MMTC has greater exposure in copper (14,650 tonnes), zinc (14,150 tonnes) and nickle (10,000 tonnes). The RBI nod will help MMTC hedge its exposure in base metals on the LME.
The Baroda-based SWIL Ltd, which was till recently engaged in copper rod business, intends to widen its activities by setting up a copper smelter project. The financial closure of the project was completed in November last. International hedging will help the company continue with its copper trading activities till it is able to set up the copper smelter project.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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