Hind Copper's plan to ramp up capacity three-fold hits hurdle
State-owned Hindustan Copper Ltd's target to raise its production capacity three-fold to 12 million tonne from the present level of 3.8 million tonne by fiscal 2017-18 is likely to suffer a major setback with expansion of its Surda mine in Jharkhand getting stalled and agreement for work on re-opening another mine, Khetri, getting delayed.
State-owned Hindustan Copper Ltd's target to raise its production capacity three-fold to 12 million tonne from the present level of 3.8 million tonne by fiscal 2017-18 is likely to suffer a major setback with expansion of its Surda mine in Jharkhand getting stalled and agreement for work on re-opening another mine, Khetri, getting delayed.
The suspension of mining activities in Surda mine following a directive from the Jharkhand government in September has impacted the work on expansion. Sriram EPC, the contractor selected for the project, has recently abandoned the ongoing project, sources said.
The licence for the Surda mine, which is spread over 386 hectare, lapsed in June. Hindustan Copper had applied for renewal of licence much before the lapse period and continued operating the mine.
But a Supreme Court directive last May limited the number of lease extensions that could be obtained without a licence renewal.
This resulted in amendments to the mineral concession rules that the state government was enforcing against mines that continue to await the renewal of their licence like the Surda mine.
Following this, Hindustan Copper instructed its contractor to stop mining.
The work on the expansion project has also been stopped by IRL Copper Mining, an arm of India Resources, which had bagged the sub-contracting work from Shriram EPC.
"Closure of Surda mine has also prevented any meaningful activities in relation to the expansion project that was being executed by India Resources' subsidiary for the contractor, Shriram EPC," India Resources said.
The contractor and the sub-contractor are now engaged in a tussle to terminate their contracts and claim compensation from each other.
Hindustan Copper had plans to expand existing mines like Malanjkhand, Khetri, Kolihan and Surda, and reopen closed Kendadih and Rakha mines, all by fiscal 2017-18.
Even as mining at Surda as well as work on its expansion remains stalled, agreement for work on re-opening and expansion of Rakha mine has been delayed, sources said.
The Rakha project was earlier awarded to a consortium of India Resources and Kopex of Poland to re-open, operate and expand the Rakha copper mine, also in Jharkhand.
Hindustan Copper, meanwhile, has made a provision to invest about Rs 305 crore during the current fiscal for expanding Malanjkhand and Khetri mines, development of Banwas, expansion of Surda and re-opening of Rakha and Kendadih mines, as per the Memorandum of Understanding it signed with the government on Tuesday.
