Hindustan Copper - an untapped GOLD Pot

Hindustan Copper (HCL), a PSU, is India's only vertically integrated copper producing company, manufacturing copper, from mining to beneficiation, smelting, refining and casting of refined copper metal. HCL has access to over 40% of copper ore resources of India, with an estimated copper ore reserves of 5,900 lakh tonne, as on 1-4-2019.

Approx 100 tonnes of copper ore (assuming a copper content of 1%) is required to produce 1 tonne of refined copper. So, HCL has a capacity to produce 59 crore tonne of refined copper in its life cycle. HCL, for FY 19 and FY 20, saw copper ore production of only 40 lakh tonne, each year, which is less than 1% of its reserves. The copper ore production in India in FY 19 was 40 lakh tonne, meeting only ~4% of the country‘s demand, while entire production was met by HCL.

HCL Mine capacity expansion is underway, to be achieved from 3.4 MTPA to 12.4 MTPA of copper ore in Phase I, to be completed by 2024, taking about 12 years or so for this expansion. Phase II expansion to 20.2 MTPA is seen theoretical as of now. Same Govt having strategically sold Hind Zinc in 2002, saw Zinc production rising by 10 times, by new promoter Vedanta Group, multiplying its valuation by over 60x in last 18 years, including dividend paid by Hind Zinc.

Govt having identified this company as non strategic, may see strategic sale in FY 22, which will be the most logical and sensible move in the larger interests of the  nation, by tapping unmined copper ore.