Hindustan Copper Limited (HCL), a public sector undertaking under the administrative control of the Ministry of Mines, was incorporated on 9th November 1967. It has distinction of being the nation’s only vertically integrated copper producing company as it manufactures copper right from the stage of mining to beneficiation, smelting, refining and casting of refined copper metal into downstream saleable products. The company markets copper cathodes, copper wire bar, continuous cast copper rod and by-products such as anode slime (containing gold, silver, etc), copper sulphate and sulphuric acid. In normal practice, more than 90% of the sales revenue is generated from cathode and continuous cast copper rods.
Hindustan Copper mines and plants are spread across five operating units:
1)Khetri Copper Complex at Khetrinagar, Rajasthan.
2) Indian Copper Complex at Ghatsila, Jharkhand,
3) Malanjkhand Copper Project at Malanjkhand, Madhya Pradesh.
4) Taloja Copper Project at Taloja, Maharashtra.
5) Gujarat Copper Project at Jhagadia, Gujarat.
Hindustan Copper also Produces gold, Silver, Nickel sulphate, Selenium, Tellurium and fertilizer as by product.
Copper, Sector Study:
The copper industry is a major contributor to the global economy. Copper is more than just a mined metal, it provides jobs and promotes of a higher standard of living. One tonne of copper brings functionality in 40 cars, powers 60,000 mobile phones, enables operations in 400 computers, and distributes electricity to 30 homes. Global copper production is expected to experience growth of 5.6% to 21.3 MT in 2022, supported by mines returning to full production, as well as the ramp-up of new mines. Production is expected to reach 24.6MT in 2024 a CAGR of 5%. Chile, Peru, Australia, Indonesia, and U.S will be the Key contributors to the growth. The combined production from these countries is expected to grow from 11.2MT in 2021 to 13.4MT in 2024.
World copper mine production increased by 4% in January 2021 compared to January 2020, with concentrate production increasing by 5% and solvent extraction-electrowinning by about 0.5%. In Chile, the world’s biggest copper mine producing country, total output was essentially unchanged with a 16% decline in SX-EW output offsetting the 5.5% growth in concentrate production. Output in Peru, the world’s second biggest copper mine producing country, declined by 7% in January due to lower output at three major copper producers. However, February data indicates on overall Y-o-Y growth of 1%. World refined copper production increased by about 1.7% in March 2021 as compared with March 2020.
World Refined Copper Usage and Supply Trends:
(Thousand metric tonnes, copper):
| Particulars | 2018 | 2019 | 2020 | Jan 2020 | Jan 2021 | Oct 2020 | Nov 2020 | Dec 2020 | Jan 2021 |
| World mine Production | 20,579 | 20,572 | 20,597 | 1,682 | 1,750 | 1,814 | 1,802 | 1,841 | 1,750 |
| World mine capacity | 24,063 | 24,163 | 24,762 | 2,082 | 2,167 | 2,140 | 2,079 | 2,158 | 2,167 |
| Mine Capacity utilization (%) | 85.5 | 85.1 | 83.2 | 80.8 | 80.8 | 84.8 | 86.7 | 85.3 | 80.8 |
| Primary Refined Production | 20,040 | 20,013 | 20,562 | 1,721 | 1,757 | 1,786 | 1,755 | 1,774 | 1,757 |
| Secondary Refined Production | 4,035 | 4,028 | 3,876 | 340 | 340 | 332 | 323 | 322 | 340 |
| World refined production | 24,075 | 24,041 | 24,437 | 2,061 | 2,097 | 2,118 | 2,078 | 2,097 | 2,097 |
| World refined capacity | 28,234 | 29,044 | 29,945 | 2,511 | 2,565 | 2,556 | 2,476 | 2,562 | 2,565 |
| Refineries capacity utilization (%) | 85.3 | 82.8 | 81.6 | 82.1 | 81.8 | 82.9 | 83.9 | 81.8 | 81.8 |
| World refined Usage 1/ | 24,484 | 24,429 | 25,030 | 2,095 | 2,069 | 2,268 | 2,187 | 2,097 | 2,069 |
| World refined stocks end of period | 1,227 | 1,229 | 1,247 | 1,290 | 1,192 | 1,343 | 1,275 | 1,247 | 1,192 |
| Period stock change | -148 | 1 | 19 | 61 | -56 | -8 | -67 | -28 | -56 |
| Refined balance 2/ | -409 | -388 | -593 | -34 | 28 | -150 | -109 | -1 | 28 |
| Seasonally adjusted refined balance 3/ | -40 | 23 | -149 | -63 | -51 | 23 | |||
| Refined balance adjusted for Chinese bonded stock change4/ | -468 | -566 | -468 | 36 | 31 | -82 | -99 | -3 | 31 |
A deficit in copper is set to deepen over the next several years as supply of the widely used metal struggles to keep up with strong demand from the power and construction sectors, compounded by the proliferation of electric vehicles and renewable energy.
Global copper market to reach 26.7 million metric tonnes by year 2027. Amid the Covid-19 crisis, the global market for copper estimated at 23.8 million metric tonnes in Year 2020, is projected to reach a revised size of 26 Million metric tonnes. 7 million metric tonnes by 2027, growing at a CAGR of 1.7% over 2020-2027. Electrical & electronics, one of the segments, is projected to grow at a 2.2% to reach 11.3 million metric tonnes of copper usage by 2027. Due to pandemic and economic crisis, growth in building and construction segment is readjusted to revised 1.2% CAGR for the next seven year period. This segment currently accounts for a 29.7% share of the global copper market. The U.S accounts for over 27.1% of global market size in 2020, while Chile is forecasted to grow at a 3.5% CAGR for the period of 2020-2027. The copper market in U.S is estimated at 6.5 million metric tonnes on 2020 and will grow at CAGR of 3.5% by 2027. China, the world second largest economy, is expected to reach copper market size of 5.2 million metric tonnes in the year 2027 trailing a CAGR of 3.5% through 2027. Among the other noteworthy geographic markets are Japan, Canada, each are expected to grow copper market at 0.1% and 1.3% respectively over 2020-2027. Copper market of Germany is expected to grow at 0.6% CAGR while rest of European market will reach 5.3 million metric tonnes by 2027.
Per Capita consumption of copper is around 10-20 kg for developed countries as compared to 1-2 kg for developing countries or may be less than that.
Total copper mine production worldwide from 2006 to 2020 (Figures in 1,000 metric tons):
| Year | Total Copper Mine Production |
| 2006 | 15,100 |
| 2007 | 15,500 |
| 2008 | 15,600 |
| 2009 | 15,900 |
| 2010 | 16,000 |
| 2011 | 16,100 |
| 2012 | 16,900 |
| 2013 | 18,300 |
| 2014 | 18,500 |
| 2015 | 19,100 |
| 2016 | 20,100 |
| 2017 | 20,000 |
| 2018 | 20,400 |
| 2019 | 20,400 |
| 2020 | 20,000 |
Refined copper demand growth worldwide from 2015 to 2021(in percent)
| Year | Copper demand |
| 2015 | 1.2 |
| 2016 | 2.5 |
| 2017 | 1.7 |
| 2018 | 2.3 |
| 2019 | 2.1 |
| 2020 | 1.8 |
| 2021 | 1.8 |
Average prices for copper worldwide from 2014 to 2025(in nominal U.S. dollars per metric ton)
| Year | Prices of Copper Worldwide |
| 2014 | 6,863 |
| 2015 | 5,510 |
| 2016 | 4,868 |
| 2017 | 6,170 |
| 2018 | 6,530 |
| 2019 | 6,010 |
| 2020 | 6,050 |
| 2021 | 6,300 |
| 2022 | 6,374 |
| 2023 | 6,449 |
| 2024 | 6,525 |
| 2025 | 6,602 |
The global mining market is expected to reach US$2427.85 billion in 2025 from US$1845.55 in 2021 growing at CAGR of 7%. Asia pacific is the largest region in the global mining market, accounting for 71% of the total global mining market.
Within a decade, the world may face a massive shortfall of copper. The copper industry needs to spend upwards of US$100 billion to close what could be an annual supply deficit of 4.7 million metric tonnes by 2030 as the clean power and EV transport sectors takes off. The potential shortfall could reach 10 million tonnes if no mines get built. After China State reserve bureau mopped all of the excess copper from 2020’s Covid-19 slow down, the copper market now looks fundamentally tight, which, may led to at least copper deficit for 5-7 years.
| Year | Copper Production (Per thousand tons) | % of global mined Output |
| 2021-2025 | 2,400 | 12 |
| 2025-2030 | 1,300 | 7 |
| Post 2030 | 2,800 | 15 |
Mining companies need to invest nearly US$1.7 trillion in next 15 years to help supply enough copper and Nickel for the shift to low carbon world.
The production of mined copper has increased dramatically over the last two decade, from 9.8 million metric tonnes in 1995 to 20 million metric tonnes in 2020, a 104% rise over 25 years. A total of 700 million metric tonnes of copper have been mined throughout history. Based on 2019 average price of US$6,042/metric tonnes, that’s worth US$4.2 trillion, more than the value of Apple and Amazon Combined. Chile has been source of majority of world’s copper and the biggest mining nation. Together Chile, Peru and China account for 48% of current global production.
Global Copper Production And Reserves:
| Country | Mine Production 2019 (ktons) | Country | Reserves 2019 (ktons) |
| Chile | 5,600 | Chile | 20,000 |
| Peru | 2,400 | Peru | 87,000 |
| China | 1,600 | Australia | 87,000 |
| United States | 1,300 | Russia | 61,000 |
| Congo | 1,300 | Mexico | 53,000 |
| Australia | 960 | United States | 51,000 |
| Zambia | 760 | Indonesia | 28,000 |
| Mexico | 770 | China | 26,000 |
| Russia | 750 | Kazakhstan | 20,000 |
| Kazakhastan | 700 | Congo | 19,000 |
| Indonesia | 340 | Zambia | 19,000 |
| Other countries | 3,800 | Other Countries | 2,20,000 |
| World Total | 20,000 | World Total | 8,70,000 |
As world enters the era of renewable energy, electric vehicles, the demand for copper will continue to rise. The demand of copper can rise by 50% in just next 20 years. Although a large chunk of the earth’s copper is already above ground, there’s still more to mine. Copper resources amount to 2.1 billion metric tonnes with a further 3.5 billion metric tonnes is undiscovered resources. At current production rates, it would take about 105 years for us to use all of it and this does not even account for recycling and new discoveries. World has copper resources which can be used till 200 years, but they are yet to be discovered. The red metal is expensive to actually get out of the ground. As a result, supply of copper has often fallen short in meeting its rising demand.
Uses Of Copper In United States:
| Copper Uses | Percentage |
| Building and construction | 43 |
| Electrical and electronics | 20 |
| Transportation equipment | 20 |
| Consumer products | 10 |
| Machinery | 7 |
Distribution of refined copper consumption worldwide in 2019, by region:
| Regions | Percentage |
| China | 51 |
| Other Asia | 19 |
| Europe | 17 |
| America | 12 |
| Africa and Oceania | 1 |
Approximately 70% of global copper is used for electrical applications and 30% for non-electrical applications. Around 55% is used in buildings, 15% in infrastructure, 10% in industry, 10% in transport and 10% in equipment manufacture.
Global Use Of Copper:
| Uses | Percentage |
| Building and Construction | 55 |
| Equipment manufacture | 10 |
| Transport | 10 |
| Industry | 10 |
| Infrastructure | 10 |
Copper Demand from Electric Vehicle Segment:
Greater use of electric vehicles and expansion of renewable energy capacity to cut noxious emission will accelerate demand growth for copper in coming years which will sustain price. Chinese President has pledge to steer the country to carbon neutrality by 2060 and U.S president pledging US$2 trillion to help cut Emission. Even India has set target of 450 GW of green energy by 2030. European Union is aiming for net –zero carbon by 2050. Stringent targets for cutting carbon emission cannot be met without electric vehicles and renewable energy from wind and solar farms, which need copper favoured in applications that conduct electricity.
Total copper demand from the EV sector to rise nearly 1.5 million tonnes in 2025 and to 3.3 million tonnes by 2030 from under 50,000 tonnes this year. EV demand for copper will account for 10% of total copper demand in 2030. The renewable energy sector could see copper demand rise from around 6,50,000 tonnes in 2020 to over 1.3 million tonnes in 2030. Global copper demand is expected to rise more than 26 million tonnes in 2025 from around 23 million tonnes this year, and much of that growth will come from renewable energy and electric vehicles. In China, the world’s biggest auto market, the goal is for electric vehicles make up 50% of all new car sales by 2035.
On average a battery electric vehicle contains about 83 kg of copper and plug in hybrid electric vehicle contain about 60 kg of copper compared with an average 23 kg in an internal combustion engine car. Electric vehicle and charging stations and renewable power generation to account for 3.19 million tonnes of copper demand in 2025 from 1.36 million tonnes this year.
Consumption volume of refined copper in India in from 2010 to 2020(in 1,000 metric tons):
| Year | Consumption Volume |
| 2010 | 514.12 |
| 2011 | 402.24 |
| 2012 | 455.79 |
| 2013 | 423.28 |
| 2014 | 434.24 |
| 2015 | 491.43 |
| 2016 | 499.27 |
| 2017 | 485.62 |
| 2018 | 512.38 |
| 2019 | 526.72 |
| 2020 | 431.7 |
World Refined Copper Usage (Figures in million tonnes):
| Year | World Refined Copper Usage |
| 2014 | 22.9 |
| 2015 | 23.0 |
| 2016 | 23.5 |
| 2017 | 23.8 |
| 2018 | 24.5 |
| 2019 | 24.4 |
Major Uses of Copper:
First Use (semis production)
| Products | Usage (%) |
| Wire | 63 |
| Flat rolled products (plate, sheet &strip) | 12 |
| Tube | 12 |
| Rods, Bars & Sections | 10 |
| Foil | 3 |
End Use:
| Products | Usage (%) |
| Equipment | 31 |
| Building and construction | 28 |
| Infrastructure | 16 |
| Transport | 13 |
| Industrial | 12 |
World Refined Copper Production (Primary+Secondary) (Figures in Million Tonnes):
| Year | Production |
| 2014 | 22.50 |
| 2015 | 22.80 |
| 2016 | 23.40 |
| 2017 | 23.50 |
| 2018 | 24.05 |
| 2019 | 24.04 |
India’s Per Capita Copper Consumption currently low – Expected to increase to 1kg (kg/person):
| Country | Per Capita Copper Consumption |
| China | 8.4 |
| USA | 4.8 |
| India | 0.50 |
The Average per capita consumption of copper is 3.2 kgs.
Refined Copper Consumption of India (Figures in %):
| Year | Refined Copper Consumption |
| Electrical | 34 |
| Consumer Durables | 8 |
| Transport | 11 |
| Building and Construction | 8 |
| Engineering | 8 |
| Defense | 3 |
| Telecom | 2 |
| Others | 28 |
Indian Government policies that will increase demand of Copper:
1)Make in India.
2) 100 smart cities.
3) Metro and Railway Projects.
4) Aatmanirbhar Bharat in Defence.
5) 450 GW target for renewable energy by 2030.
5) PLI schemes for consumer electronic industry.
6) Accelerated growth for electric vehicles.
World Copper Mine Capacity to increase (million tonnes):
| Year | Mine Capacity |
| 2019 | 24.1 |
| 2024 | 29.5 |
Growing at CAGR of 5.1%. Average capacity utilization is at 85%.
Copper Deposits in India:
Rajasthan: Largest reserves/resources of copper ore. 813 million tonnes (53.81%). Jharkhand: 295 million tonnes (19.54%). Madhya Pradesh: 283 million tonnes (18.75%). Other copper reserve accounted for remaining 7.9% is there in remaining states of India.
Significant Gap in Domestic copper ore mining capacity and consumption by custom smelters in India:
There is significant mismatch between India’s processing requirement and copper mining capacity. Approximately 100 million tonnes of copper ore is required to produce 1 million tonnes of refined copper. The copper core production in India for 2020 was 3.97 MT, meeting only 4% of the country’s demand. The current mining is entirely catered by Hindustan Copper.
India’s Refined Copper Capacity vs. Copper Mining Capacity (‘000 tonnes):
| Particulars | Figures |
| Refining Capacity | 1028.5 |
| Current Mining Output Level | 32.4 |
| Gap | 996.1 |
Refining Capacity Break-up (‘000 tonnes):
Hindalco: 500, Vedanta: 460, Hindustan Copper: 68.5. But currently plant of Vedanta is closed due to environment concerns.
Vertically Integrated Operations:
| Particulars | Figures |
| Mining | Copper ore 1% |
| Beneficiation | Copper concentrate 17-26% |
| Smelting | Anode 99.5% |
| Refining | Cathode Refined Copper 99.99% |
| Continuous cast rod plant | Continuous cast copper rod |
Smelting and refining and manufacturing of rods facilities are utilized when TcRc moves up. Currently TcRc prices are low. As per the current business plan, Hindustan Copper is selling copper concentrate only as it gives highest realization to the company.
COPPER IS NEW OIL:
Copper is new oil. Copper will play a great role in Paris climate change. Without serious advancements in carbon capture and storage technology in the coming years, the entire path to net zero emission will have to come from electrification and renewable energy. As the most effective conductive material, copper sits at the heart of capturing, storing and transporting these new sources of energy. In fact, discussion of peak oil demand overlook the fact that without a surge in use of copper and other key metals, the substitution of renewables for oil will not happen.
Mining sector remains wary of a pivot towards growth after the price collapse in the mid 2010 as severely punished any front footed producers. Even as copper prices have rallied 80% over the last 12 months there are no new green field projects of copper. Despite a commodity boom that is boosting profits, miners aren’t throwing cash to develop new copper projects, raising concerns about the future shortages of some metals. Technology metals such as cobalt, copper and lithium are set for large deficit, amid rising demand from makers of batteries, EV’s and wind turbines. For instance, the prices of copper used in construction and to conduct electricity has almost doubled over the past 12 months to a record of US$10,762 a metric ton in May 2021. The total demand of copper is forecast to increase 40% by 2030 with green energy demand jumping as much as 900%, leaving a copper supply shortage of 8.2 million metric tonnes by 2030, which is twice the size of the gap that triggered the bull market in copper in early 2000s.
Copper is on a path to reach US$15,000 per ton. Copper might average at US$9,675/ton in 2021, US$11,875/ton in 2022, US$12,000/ton in 2023 before a material set up to US$14,000 in 2024 and US$15,000 in 2025.
Indian domestic copper industry has been operating at almost half of its capacity for the last two financial years due to closure of Vedanta Ltd.’s 4,00,000 tonnes smelter unit at Tuticorin that accounted for nearly half of India’s output. Hindalco Industries alone accounted for 80% of the overall refined copper production, while Hindustan copper and Vedanta’s Silvassa unit produced the balance. The only company that benefits from copper rally is Hindustan Copper, given a US$1,000 per tonne increase in copper price would mean higher operational profits. A surge in copper price boosts the top and bottom line of Hindustan Copper. For Every $100 increase/decrease in the LME price of copper, the turnover and profit margin of the Hindustan Copper varies by Rs 18-20 crore. Copper might reach $15,000 per ton by 2025, then just imagine the profit margins of Hindustan Copper by 2025. Profit Margins will go up sharply.
Battery storage systems are emerging as one of the key solutions to effective integrate high shares of solar and wind renewable in power systems worldwide. Globally, energy storage deployment in emerging markets is expected to increase by over 40% each year until 2025. The renewable energy sector will see a shift to grid independent systems in the coming months and storage systems such as solar plus storage will see a major boost in the market. The government of India has a policy focus towards solar plus storage systems also seen through hybrid policy in place and recent award of the renewable project cum storage capacity.
World is moving towards green and clean energy. But for that we need battery storage system. Because if there is no wind or sunlight sometime, there can be disruption in power supply. So without battery storage system green and clean energy will not be successful. Battery storage system will increase demand of graphite, lithium and cobalt by 500%. But the real long term winner will be more conventional metal like copper. Demand for copper for new energy sources will grow by 8% but that’s equivalent to almost 30 million tonnes cumulative extra demand by 2050. Copper is used in all energy technologies therefor copper is the mineral for which the demand will be least impacted by significant changes in the technology based mitigation scenarios.
NICKEL, SECTOR STUDY:
The global nickel production volume is estimated to reach 2.76 million tonnes in 2024, growing at a CAGR of 2.92% from 2020 to 2024. Stainless steel is the largest end use for nickel, accounting for two-thirds of total consumption. While nickel is well known as a component in the manufacture of nickel cadmium batteries, an important evolving use in production of lithium-ion batteries for electric and hybrid vehicles.
Nickel Global Use (Figures in Percentage):
| Nickel Global Use | Percentage |
| Stainless Steel | 71 |
| Alloys | 14 |
| Electroplating | 6 |
| Casting | 3 |
| Batteries | 4 |
| Others | 3 |
World mine production of nickel, by country:
| Country | Thousand Tonnes | Percentage Of Total |
| Indonesia | 800 | 29.8 |
| Philippines | 420 | 15.7 |
| Russia | 270 | 10.1 |
| New Caledonia | 220 | 8.2 |
| Canada | 181 | 6.8 |
| Australia | 180 | 6.7 |
| China | 110 | 4.1 |
| Brazil | 67 | 2.5 |
| Cuba | 51 | 1.9 |
| Other countries | 384 | 14.3 |
| Total | 2,683 | 100 |
World reserves of Nickel (Figures in Million Tonnes):
| Country | Nickel Reserves |
| Indonesia | 21.0 |
| Australia | 20.0 |
| Brazil | 11.0 |
| Russia | 6.9 |
| Cuba | 5.5 |
| Philippines | 4.8 |
| China | 2.8 |
| Canada | 2.6 |
| Unites States | 0.1 |
| Other countries | 14.0 |
Total world nickel reserves were estimated at 89 million tonnes.
Average Prices for Nickel worldwide from 2014-2025 ( Figures in U.S Dollar per metric ton):
| Year | Price |
| 2014 | 16,893 |
| 2015 | 11,863 |
| 2016 | 9,595 |
| 2017 | 10,410 |
| 2018 | 13,114 |
| 2019 | 13,914 |
| 2020 | 13,500 |
| 2021 | 13,800 |
| 2022 | 14,213 |
| 2023 | 14,639 |
| 2024 | 15,078 |
| 2025 | 15,530 |
Global Mine Production of Nickel from 2006 to 2020 (Figures in 1,000 metric tons):
| Year | Production |
| 2006 | 1,570 |
| 2007 | 1,650 |
| 2008 | 1,580 |
| 2009 | 1,410 |
| 2010 | 1,620 |
| 2011 | 1,940 |
| 2012 | 2,220 |
| 2013 | 2,630 |
| 2014 | 2,450 |
| 2015 | 2,280 |
| 2016 | 2,090 |
| 2017 | 2,160 |
| 2018 | 2,400 |
| 2019 | 2,610 |
| 2020 | 2,500 |
The global demand for nickel to be used in EV batteries only amounted to 60,000 metric tons in 2018. This number is expected to increase over tenfold by 2025 to some around 6,65,000 tonnes worldwide. Lithium ion batteries used in electric vehicles use nickel as an essential component.
Global demand for nickel in electric vehicle batteries from 2018 to 2025 (figures in 1,000 metric tons):
| Year | Demand |
| 2018 | 60 |
| 2025 | 665 |
Hindustan copper has started India’s first facility to produce nickel, a metal for which India is completely dependent on imports. The new facility of Hindustan Copper for Nickel is located at the company’s Indian Copper Complex at Ghatshila in Jharkhand. Poised to be the only unit in India to produce Nickel Metal of LME grade. The capacity of plant is poised to be at 50 tonnes per annum. But the Nickel output is expected to increase nearly eight times after the completion of mine expansion. Annual consumption of Nickel in India is around 45,000 tonnes. At present in world, there is surplus of Nickel at around 76,300 tonnes but from end of this year Nickel will remain in deficit till 2025.
DEEP INSIGHTS OF HINDUSTAN COPPER:
Hindustan copper is only operating copper ore mining company in India. It owns all the operating mining lease of copper ore. Company has about 2/5th of India’s copper ore reserves and resources. It has reserves of around 167.08 million tonnes. Company total copper resources and reserves are at 570.40 million tonnes. It has two expansion plans. Phase I: Increasing capacity from 3.97 Mtpa to 12.2 Mtpa which is currently under implementation and Phase II: increasing capacity from 12.2 Mtpa to 20.2 Mtpa.
Operating Units:
| Plant | Product | Capacity p.a |
| Khetri Copper Complex | Copper Concentrate | 3.0MT |
| Gujarat Copper Project | Copper cathode, Anode slime | 50,000 tonnes |
| Taloja Copper Project | Copper wire rod | 60,000 |
| Indian copper complex | Copper concentration, cathode, anode smile, sulphuric acid and copper sulphate | 18,500 |
| Malanjkhand | Copper concentrate | 5MT |
Production Overview:
Ore (‘000 tonnes):
| Year | Production |
| FY18 | 3,675 |
| FY19 | 4,122 |
| FY20 | 3,968 |
| Dec 20 | 2,278 |
Metal in Concentrate (‘000 tonnes):
| Year | Production |
| FY18 | 31,793 |
| FY19 | 32,439 |
| FY20 | 26,502 |
| Dec 20 | 16,660 |
Sales Overview:
Metal In Concentrate (‘000 tonnes):
| Year | Sale |
| FY18 | 9,133 |
| FY19 | 21,953 |
| FY20 | 12,669 |
| Dec 20 | 25,001 |
Hindustan Copper’s Copper Reserves and Resources:
| Mines | Reserves (MT) | Average Grade (%) | Resources (MT) | Average Grade (%) |
| MCP | ||||
| Malanjkhand | 120.35 | 1.31 | 186.57 | 0.66 |
| ICC | ||||
| Surda | 5.02 | 1.16 | 26.96 | 0.99 |
| Rakha | 3.36 | 1.14 | 43.83 | 0.94 |
| Kendadih | 0.77 | 1.41 | 17.76 | 1.25 |
| Sideshwar | 00 | 00 | 13.73 | 1.46 |
| Chapri | 00 | 00 | 49.87 | 1.05 |
| Tamapahar | 00 | 00 | 26.46 | 0.86 |
| Total ICC | 9.15 | 1.17 | 178.61 | 1.04 |
| KCC | ||||
| Khetri | 25.33 | 1.44 | 23.49 | 1.40 |
| Kolihan | 9.07 | 1,31 | 4.57 | 1.41 |
| Chandmari | 3.18 | 1.11 | 10.08 | 0.95 |
| Total KCC | 37.58 | 1.38 | 38.14 | 1.28 |
| Total | 167.08 | 1.32 | 403.32 | 0.89 |
Reserves (MT):
| Particulars | Reserves | Average Grade |
| Proved | 128.27 | 1.30 |
| Probable | 38.81 | 1.37 |
| Total | 167.08 | 1.32 |
Resources (MT):
| Particulars | Resources | Average Grade |
| Proved | 128.27 | 1.30 |
| Probable | 38.81 | 1.37 |
| Total Reserve | 167.08 | 1.32 |
| Remaining Resources | 403.32 | 0.89 |
| Total | 570.4 | 1.01 |
Expansion Strategy Of HINDUSTAN COPPER:
1)Expansion of existing mines, Malanjkhand , Khetri & Kolihan, Surda: from 3.71 MTPA to 8.2 MTPA
2) Re-opening of closed mines: Rakha, Kendadih 1.9 MTPA.
3) New mines and green field exploration: Awarded RP-Balaghat. New mines – Banwas and chapri Sidheshwar and applied for area reservation in other places. 0.26 MTPA to 2.1 MTPA.
4) Exploration to establish depth and strike continuity of ore body.
5) Sustainable Development: Utilization of waste rocks.
6) Niche Product Segment: manufacturing value added products.
Estimated Production Capacity and Project wise Capex:
| MTPA | Existing Capacity (MT) | Phase I expans-ion | Phase I estimated capex (Rs mn) | Scheduled start of production Phase I | Phase II Expansion | Total Capex (Rs mn) |
| Malanjkhand | 2.24 | 5.0 | 18,560 | 2022 | 8.0 | 29,000 |
| Khetri & Kolihan | 0.86 | 2.3 | 4,430 | – | 4.4 | 9,100 |
| Surda | 0.31 | 0.9 | 2,190 | 2022 | 1.0 | 3,500 |
| Total | 3.71 | 8.2 | 25,180 | 13.4 | 41,600 | |
| Kendadih | – | 0.4 | 940 | 2022 | 0.2 | 950 |
| Rakha | – | 1.5 | 3,150 | – | 2.5 | 5,500 |
| Total | – | 1.9 | 4,090 | 2.7 | 6,450 | |
| Banwas | 0.26 | 0.6 | 900 | Commenced production in Feb 18 | 0.6 | 900 |
| Chapri-sidheshwar | – | 1.5 | 4170 | – | 2.5 | 5,500 |
| Dhobanj-pathargora block | – | – | – | – | 1.0 | 550 |
| Total | 0.26 | 2.1 | 5070 | 4.1 | 6,950 | |
| Grand Total | 3.97 | 12.2 | 34,340 | 20.2 | 55,000 |
Current Status of Mine Capex for enhancement of Capacity:
| Mine | Investment Approval | Invite RFQ | Issuance Of RFP | Award of Contract | Current status of mine capex | Likely schedule Comple- Ion |
| Malanj- khand | Investment approvals in place | completed | Completed | Completed on April 9, 2015 | Work in progress | FY22 |
| Khetri | Investment approvals in place | Under tendering stage with modified Design | ||||
| Surda | Investment approvals in place | completed | completed | Completed on Nov 28, 2011 | Work in Progress | Mining Lease Extension awaited |
| Kendadih | Investment approval in place | completed | Completed | Completed on Jan 20, 2012 | De-watering and Comm Ssioning of mining Facility completed. Development work in progress | Production will start soon. FY2022 |
| Rakha | Investment approval in place | Through MDO Route | ||||
| Chapri-sideshwar | Investment approval in place | Through MDO route | ||||
| Banwas | Investment approval in place | Completed | completed | Completed on FEB1, 2010 | Development of deposit completed contractor appointed and production started in 2019 |
Movement of Loan (Rs in million):
| Year | Loan |
| FY2017-18 | 6,569.5 |
| FY2018-19 | 10,701.1 |
| FY2019-20 | 15,636.8 |
| FY2020-21 (Dec 20) | 12,704.1 |
Total Indebtedness as on December 31, 2021: Rs 12,704.1 million. Long term loan of Rs 10,849.1 million at an average cost of 6.17 p.a. Short term loan Of Rs 1,4550 million at average cost of 6.60% p.a. CC facality of Rs 400 million at 6.31% p.a.
Exploration of new deposits by HINDUSTAN COPPER:
1)District Alwar, Sikar, Jhunjhunu, Chittorgarh (Rajasthan): 6 copper blocks.
2) District Balaghat (Madhya Pradesh): 4 copper blocks.
3) District East Singbhum (Jharkhand): 3 copper blocks.
4) Application submitted for reservation of area for conservation of copper mineral under Rule 17(A) of mines and minerals Act, 1957.
5) Awarded RP in 580.73 sq km in the district of Balaghat.
Setting up New Projects by HINDUSTAN COPPER:
| Project | Authorized Capital (Rs mn) | Status |
| Chattisgarh Copper Ltd JV with CMDC for exploration & exploitation of copper in Chhattisgarh State (HCL holding 74%). | 100 | ▪ Chhattisgarh Copper Limited has been incorporated on 21.05.2018 as JV Company between HCL and CMDC. ▪ Exploration identified and area reservation applied for 2 Blocks ▪ CMDC (JV partner of CCL ) has applied to NMET for fund support for exploration activity in CCL copper blocks Hiddar and Bodal in Chhattisgarh. |
| Khanij Bidesh India Ltd (KABIL). JV with NALCO and MECL to identify , acquire, develop , process and make commercial use of strategic & other minerals in overseas locations for supply in India (HCL holding 30%). | 1,000 | ▪ Khanij Bidesh India Limited (KABIL) has been incorporated on 08.08.2019 as a JV company between NALCO, HCL and MECL. ▪ KABIL is co-ordinating with countries like Argentina, Bolivia, DR Congo, Australia, Russia etc. who have potential of such critical minerals, specifically lithium and cobalt to fulfill its objective of sourcing these critical minerals to India to develop domestic Battery industry for Electro-vehicles. |
Hindustan copper has chalked out a strategy, which includes reopening of closed mines, to augment production capacity to up to 20 million tonnes per annum by 2024. Number two strategy will be construction of new mines. For achieve production target of 20 million tonnes per annum company will pump in Rs 5,500 crore over the next six years. Company is currently catering around 5% of the domestic copper demand, but plans to take it to 30%. Hindustan Copper will able to carter around 30% domestic requirement of copper after this expansion of production capacity. More than 60% of the company’s revenue comes from Malanjkhand open-cast copper mine, whose production capacity is 2.5 MTPA currently. Company is going to increase production capacity of Malanjkhand to 5 million tonnes and thereafter 8 million tonnes.
Hindalco will buy copper concentrate from Hindustan Copper. Hindalco will use about 60% of copper concentrate produced by HINDUSTAN COPPER. India’s per capita consumption of copper is going to rise 1 kg from 0.5 kg which is far behind the world average of 3 kg and Chinese average of 6 kg.
Key Financials:
Total Revenue (Rs in mn):
| Year | Total Revenue |
| FY18 | 17,469 |
| FY19 | 18,529 |
| FY20 | 8,888 |
| Dec 20 | 12,900 |
EBITDA and EBITDA Margin (Rs in mn):
| Year | EBITDA | EBITDA Margin (%) |
| FY18 | 3,080 | 17.6 |
| FY19 | 5,387 | 29.1 |
| FY20 | -1,837 | -21.2 |
| Dec 20 | 4,033 | 31.3 |
PAT and Net Income Margin (Rs in mn):
| Year | PAT | Net Income Margin (%) |
| FY18 | 796 | 4.6 |
| FY19 | 1,455 | 7.9 |
| FY20 | -5694 | -64.1 |
| Dec 20 | 1,468 | 11.4 |
Net Worth (Rs in mn):
| Year | Net Worth |
| FY18 | 8,315.9 |
| FY19 | 9,592.4 |
| FY20 | 3,392.9 |
| Dec 20 | 5,141.9 |
By all these I Prefer buy call on HINDUSTAN COPPER at CMP of Rs 162.80 on 1 June, 2021.