Hindustan Copper chairman and managing director P Parvathisem told The Financial Express that out of the 30,000 contracted quantity, 20,000 tonnes had been recently received by the company. "It is prudent to go in for imported concentrates in the wake of the falling copper prices on the London Metal Exchange, as it helps the company to get insulated from the values of LME", he said. It may be noted that almost all copper manufactures in the private sector use imported concentrates to manufacture copper products.

"The main advantage lies in the fact that as LME prices go down, the concentrate prices also witness a decline. Hindustan Copper which has to bear with mining costs has taken a concerted decision to import copper concentrates at lower costs, which will provide some respite to the company", added Parvathisem.

The concentrate is converted into cathodes at the company's smelters and then drawn into wires and rods. According to the CMD, the import of copper concentrates is more economic than the import of copper cathodes. Earlier the company was importing cathodes but has discontinued it since. "The last budget removed the five per cent duty differential between cathode and CC rods and hence there was no factor of any gain whatsoever by importing he same," he said.

It is estimated that conversion costs are also high in the case of copper cathodes than imported copper. While copper cathodes can be converted at only continuous caster plants, imported concentrates can be converted at any of the company's smelters. Moreover, margins and manpower utility are definetely higher in the case of copper concentrates.

Hindustan Copper has been reeling under a sliding LME price over the last two years and uneconomic mining operations had rendered the company to register losses currently. The costs of manufacturing copper has been almost 2.5 times the world costs.

Apart from a financial restructuring, the public sector copper major had also taken steps to downsize its burgeoning workforce. The company expects about 2000 workers to take VRS in the current year. The company was going in for increase in smelting capacity at its Khetri unit in Rajasthan and Ghatsila in Bihar.

Apart from streamling its mining activities by closing down three of its unviable mines, the copper manufacturer was also planning increase its mining capacity at Malanjkhand, one of its best mines located in Madhya Pradesh. One of the hardest rock open pit mines in the country, the estimated potential of this mine is 2 million tonnes per annum. The metal in concentrate (MIC) in Malanjkhand is about 80,000 tonnes which is slated to be increased to 1,00,000 tonnes, said Parvathisem.

Insught

Hindustan Copper is taking a look into certain diversified areas which has synergistic linkages with the main areas of operation. According to CMD, P Parvathisem, the company was planning to make oxygen-free high conductivity copper which has special applications.

"The company was also contemplating the manufacture of wire bars with inferior feed material which would be priced much low than the regular bars that the company manufactures", he said.

Almost 80 per cent of the company's product mix comprises of wire rods, 12 per cent is of bars and the balance eight per cent is sold as cathodes. The private players manufacture wire rods and cathodes as the two main end-products.