Project delay will cost Hind Copper dear

The time overrun of nearly two years for Hindustan Copper Ltd’s 5 million tonne per annum underground mine development project in Madhya Pradesh is likely to cost the copper miner dear.

According to sources, the delay in obtaining clearance from the National Wildlife Board would have both direct and indirect cost implications.

The project, which is now being taken up for implementation after obtaining all necessary permissions, would now cost more. HCL, the only copper mining company in the country, had envisaged a capital cost of ₹1,856 crore for the underground project including a concentrator plant.

The project is expected to take five years for completion.

The IVRCL led consortium, the selected mine developer and operator, according to the set terms, is eligible for higher price compensation (at current rates) for equipment and labour costs.

The delay has also cost impact on operations of the existing open cast mining at Malanjkhand, which is located in Balaghat district of Madhya Pradesh near the Kanha National Park.

The underground project is to be set up below its open cast mining site.

As envisaged in the original underground project plan, the open cast mining activity was to taper off in the past two years and was scheduled to end this year.

However, the delay has prompted HCL to extend open cast operations for at least another couple of years at a higher truck borne logistics cost. “The underground project can achieve 50 per cent of its targeted extraction level only after three years of development. So in the next few years, the operations at the open cast mine is required to be significantly scaled up before any production slowdown takes place”, observed an industry analyst.

Insiders said that continuation of the open cast mining parallel to the development work of the underground project, however, would enable HCL to meet its overheads.

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