An industry source said that the company has recently received a 20,000-tonne supply of concentrate from Minerals & Metals Trading Corporation via global tendering. The concentrate is converted to cathodes at the company's smelters and then drawn into wire and rods.

The import of copper concentrates attracts a duty of just 10 per cent and is more economical than that of cathodes, which carries a duty of 35 per cent.

Although the company at an earlier stage imported copper cathodes, it has given up the practice on account of higher conversion costs. Earlier, HCL had contracted copper cathodes from Codelco of Chile, which has the largest copper mines in the world.

Copper cathodes can be convertedonly at continuous caster plants whereas the company can convert imported copper concentrates at any of its smelters. Further, margins and manpower utility are definitely higher in the case of copper concentrates.

Industry sources contend that 20,000 tonnes of copper concentrates would yield only 5,000 tonnes of metal which is insufficient at times. This works out cheaper for the public sector copper major than mining the primary metal, which is uneconomical at present what with the pressure of low LME prices and a burgeoning workforce.

The company plans to strengthen its operations at two of its mines at Malanjkhand in Madhya Pradesh and at Kolihan in Rajasthan. The Malanjkhand mine, which is one of the largest hard rock open pit mines in the country, has an estimated potential of almost two million tonnes per annum. HCL plans to increase the yield of this open cast mine -- operating since November 1992 -- to three million tonnes.

Kolihan, which produces 3,000 tonnes a day, has a geometrical wide orebody that renders better metallurgical prospects. HCL is mulling increasing the yield of its Khetri smelter (Rajasthan) in order to secure a reasonable share in the copper market.

The company, as part of its restructuring strategy, will refrain from investing further in its Ghatsila mines which include the ones at Pathargora, Chobri and Sudra.

Industry analysts contend that the company, being a primary producer of copper, has to bear with the natural disadvantage of high costs incurred on account of labour-intensive mining operations and a limited scope of subsidising costs.

Moreover, the metal content of Indian ore averages at around 1 per cent as against the international average of 2.5 to 4 per cent in mines of Zambia or Chile. As a result the cost works out to be 2.5 times the world cost.

The company, which owns some of the oldest and deepest mines in the country, found it viable to shut down a few of its existing mines including the one at Mosabani in Bihar.