What we do
We are a research and consultancy business, specialising in mining.
We currently offer a package of reports on 100 global mining projects, aimed at mining-service companies wishing to expand internationally.
In addition, we work with clients on a consultancy basis, with this work ranging from from
providing strategic advice on particular markets, to analysing market trends
and assisting clients in pursuing market opportunities.
For further information on our services, please contact us at +61 411 478307 or melbourne@resourcesmonitor.com.au.
Source: Stephen Codrington
Mining Notes
INDIA AND COPPER
9 April 2019
Hindustan Copper, a
government-controlled company, is India’s only copper miner. It is in the
initial stages of a major expansion program, at a cost of US$800 million.
Currently, Hindustan
Copper produces around 40,000 tonnes of copper per year. The company plans to
increase this to around 200,000 tonnes by 2025.
Construction is underway
at a major new underground mine in the state of Madhya Pradesh. Yet to come are
expansions at its operations in the states of Jharkhand and Rajasthan.
Hindustan Copper’s
production of 40,000 tonnes is only a small proportion of the 650,000 tonnes
that India used last year domestically (e.g. in the electrical, construction
and transport industries).
Imports, mainly from
other Asian countries, make up the main part of the market. Imports comprise
both copper metal and copper concentrates, with the latter refined in India to
produce metal.
What is the outlook for
imports? Consider the following possible scenario (figures are in
tonnes):
|
|
2018
|
2025
|
|
Domestic
consumption
Supplied
by Hindustan Copper
Supplied
by imports
|
650,000
40,000
610,000
|
1,000,000
200,000
800,000
|
The projected increase
in annual domestic consumption, from 650,000 to 1 million tonnes, represents an
increase of 50%. Such an increase is commonly expected by analysts.
But even with the strong increase in production by Hindustan Copper, imports
increase strongly too (from 610,000 to 800,000 tonnes per year).
These figures are rough-and-ready. But they illustrate India’s dependence on
imports. This dependence may prove to be expensive, on two grounds.
The first relates to future copper prices: many analysts see a
steady increase in coming years, reflecting falling grades and only a limited
number of major projects on-the-drawing-board globally.
The second relates to a problem faced by Vedanta Resources, one of
the country’s two refiners using imported copper concentrates.
Last year, its refinery in the southern state of Tamil Nadu was closed by the
state government on environmental grounds. The company has been since locked in
legal battles with the state government, with these still to be resolved.
As a result of the refinery’s closure, imports of copper metal have increased
strongly in the past year, at the expense of cheaper concentrate imports. This
will continue if the conflict is not resolved.
Copper consumption per capita in India is low by world standards – for example,
it is less than 20% of that in China. A low-cost copper industry is important
for India’s overall economic development. This will not be achieved while local
mining remains limited and local refining disrupted.
-----------------------------------------------------------------------------------------------------------------
Hindustan Copper’s
mining expansion is one of the projects covered in our global mining service.
