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The National Aluminium Co Ltd (Nalco) is exploring the possibility of a strategic, but minority partnership in underground copper mining with Hindustan Copper (HCL).
Nalco has appointed Icra Management Consultancy Services (IMaCS) for due diligence and a valuation report on the HCL's Malalanjkhand assets, considered to be the single largest, having nearly 70 per cent of the country's reserves.
Mr B. L. Bagra, CMD of Nalco, told Business Line that IMaCS would submit its report by March-end. He said discussion for a formal agreement for a joint venture could begin in April, once the valuation report was found favourable.
The broad understanding between the two listed public sector miners is that a mutually agreed valuation of Malanjkhand assets would form the base of any joint venture proposal. It is also understood that HCL would have the majority stake in the JV.
The CMD of HCL, Mr Shakeel Ahmed, also confirmed that such a proposal was being actively considered.
An expansion project at Malanjkhand — from the present 2 million tonnes per annum to 5 million tonnes per annum — is the key to the HCL's ore production increase strategy, to be complete by the end of fiscal 2017.
Detailed project report
According to the plans, ore extraction will go underground instead of current open cast operation. In 2010, a detailed project report for the Rs 2500-crore Malanjkhand underground mine construction project was prepared in-house by HCL with certain broad technical references to a report prepared by BC Metal of Japan in 1991-92.
The current production of MIC at Madhya Pradesh ranges between 17,000 and 19,000 tonne a month. The proposed phase I Malajkhand expansion project, incidentally, was appraised by IMaCs.
Malanjkhand project, located in Balaghat district of Madhya Pradesh, is estimated to command ore reserves, including resources, of 221.00 million tonnes (containing 1.31 per cent copper). HCL expects that its reserves at Malanjkhand to last for 30 years.
IMC copper resources
IMC, an internationally accredited valuer, certified that HCL's total copper resources in JORC standard as on April 1, 2010, stood at 618.01 million tonnes of an average 1.05 per cent grade.
HCL currently holds all the operating copper mining leases in the country.
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