The Indian consortium shortlisted for copper and gold mining in Afghanistan are shortly expected to conduct a due diligence on the deposits.
The consortium members, which include state-owned PSUs such as Hindustan Copper, Nalco, SAIL and MECL, will meet after June 5 to decide on the equity shareholding and also take a call on whether to include stone miller machine suppliers uaeprivate sector companies as part of the consortium. Sterlite Industries, Monnet Ispat & Energy and Jindal Steel & Power are among the private players who have also been shortlisted by the Afghan mines ministry.
“We have sent four teams to Afghanistan for site visit. We will study their reports and do a due diligence on the reserves. The last of these teams will return on June 5. We are scheduled to meet after that to take a call on equity shareholding among the consortium members. We are getting feelers from other private players interested in joining the consortium and will decided on whether to invite them as part of the team,” Shakeel Ahmed, HCL chairman & managing said.
Incidentally, the shortlisted candidates also include big investors from the Emirates, Canada and Australia. Mr Ahmed said the Indian consortium’s move would be on the lines of Afisco, the consortium of PSUs and private players, which successfully beat global competition to bag the rights for exploring nearly a billion tonnes of iron ore reserves in remote Hajigak.
Asked if they would seek sovereign guarantees for mining the copper and gold reserves in Afghanistan, Ahmed said: “We will follow on the lines of Afisco.”
“The only concern is security and infrastructure. India and Afghanistan share historical ties and both the government and the locals have been very friendly when our team visited the country. We are keen to explore the reserves in that country since it is in our interest to secure our mineral needs,” he added. Closer home, HCL is planning to add greenfield mines to raise output. It is planning a 51:49 joint venture with Rajasthan Mines & Minerals
and take up exploration of four copper deposits at Alwar, Bhilwara and Dungarpur. While RMML holds the mining lease in these properties, HCL will provide the mining expertise.
HCL posted a 44% jump in net profit at 323 crore in 2011-12 against 224.1 crore in the previous fiscal, riding on a significant 28% rise in sales volume during the year. The country’s only vertically-integrated copper company posted vastly improved results driven by mining operations, despite a drop in average price realisation.
The benchmark copper prices on the London Metal Exchange dipped 14% in the fourth quarter of FY12 on low demand from China, eurozone fears and the Greek debt crisis. During the fourth quarter, net profit zoomed to 137 crore against 61 crore in the previous corresponding quarter. Sales shot up a significant 97% to 644 crore against 327 crore in the same period last year. By recording net profit for three consecutive years, HCL has posted a turnaround and thus managed to come out of the ambit of the Board of Reconstruction of Public Sector Enterprises.