He said that during 1993 to 96 copper consumption rose by 18.5 per cent per year and during the past two years, the rate has dropped to 8.0 to 8.5 per cent per year. Total consumption during 1997-98 has been 376,660 tonnes.

As against the above the total capacity for refined copper by 2000 AD would be as under between different producers.

In addition to this, Birla Copper and Sterlite Copper have announced their plans to increase their capacity by 50,000 tonnes each and after five years the total capacity will increase to 420,000 tonnes.

Notwithstanding the above, Dr Viswanathan said that secondary copper would play an important role in meeting theconsumption requirements of the country. Over the years the use of imported scrap has been on the rise and imported scrap along with locally available scrap would meet 35 to 40 per cent the demand.

Regarding the future demand he said that at best it would be around 522,450 tonnes in 2001-02 and 754,900 tonnes in 2006-07. As against the above indigenous refined metal production capacity would be 320,000 tonnes by 1999 and 420,000 tonnes by 2000 AD. Since 35 to 40 per cent of the demand would be met by secondary metal there is no need for any fresh smelters based on imported concentrates, he said.

Lokeshwar Prasad of Hindustan Copper Ltd speaking on the occasion, said that the terms of trade were now going in favour of miners and against the customs smelters, who depended on imported concentrates. He said that HCL had floated global tenders thrice for concentrates during 1998 but drew a blank. It was prepared to go as low as $ 40 per tonne of contained copper in concentrates as treatment charges and fourcents as refining charges but still they could not get the raw material. He expected this tight position to continue for some years.

Sanjay Jain of HBSC Securities speaking on `Funding India's metals industry expansion,' said that due to high cost of capital in India funding of metals projects was not attractive. Further the prices of commodities were falling and finance was difficult to come by.

He said Rs 100 invested in January 1994 has become Rs 56 in aluminium, Rs 37 in metals, Rs 24 in FI scrips and Rs 14 in steel scrips. The capital cost was high, there was heavy burden of interest during construction, time over-runs and long gestation.

Coming specifically to copper he said one project was being erected since 1992 and had yet to come into operation. Indo-Gulf or Birla Copper had an internal rate of return of 10.1 per cent, 11.6 per cent including tax break, while the cost of capital was 16.6 per cent and therefore the project will have to struggle hard to be viable. Sterlite project had aninternal rate of return of 19 per cent while the capital cost was 16.8 per cent but it had other problems to face.

Tariq Salaria of Brandeis (Brokers) Ltd, said that Indian copper projects will have to take full advantage of the tariff protection that they are enjoying in order to survive. He said until 2001 the terms of trade will be against the new copper smelters based on imported concentrates.