Hindustan Copper Ltd has overcome a major hurdle in recommencing its Rs 210-crore Surda mine expansion project work, which was stuck for months because of a dispute between the lead contractor and the sub-contractor. According to a source, the project work is expected to be in full swing from January.
Its principal project contractor Shriram EPC and the sub-contractor Indian Resources Copper Mining (P) Ltd have ended their stand-off through a settlement and paved way for the resumption of project work.
Hindustan Copper has decided that it would allow an extension of time until 2018 for completion of the delayed project. The settlement involves a payment of Rs 1.60 crore by SEPC to IRCMPL.
The expansion project at the operating underground mine in Jharkhand, from which Hindustan Copper planned to extract more copper ore by increasing the depth, had run into several problems, including the stand-off between the project contractor and subcontractor.
The expansion would allow an additional life of the mine of five years and enhance Surda mine’s yearly production capacity from 0.4 million tonne per annum to 0.9 million tonne.
Australian Stock Exchange-listed Indian Resources Ltd, the principal of IRCMPL, operates Surda mine for Hindustan Copper. The expansion project development will run concurrent to the existing mine operations.
Jharkhand Government had stopped the Surda mine operation and its expansion project work over the mining lease renewal issue during a nine-month period since September 2014 until the middle of June this year.
The state-owned copper miner had last year also suffered from 20 per cent fall in copper prices as well as 21 per cent fall in copper grade from its open cast mine at Malanjkhand in Madhya Pradesh, which contributes around 65 per cent of the company’s ore production.
Implementation of the company's another proposed plan to develop an underground mine Malanjkhand (below the existing open cast mine) to increase copper ore production from 2 million tonnes per annum (mtpa) to 5 mtpa by an estimated cost of Rs 1,856.74 crore is also behind schedule.
The mine expansion work in Rajasthan, particularly of Khetri and Kolihan deposits, are also slow. However, development exercise for Banwas deposit, also in the nearby are of Rajasthan, which started in May 2010, is expected to be complete sometime later this year.
The expansion at Khetri and Kolihan and the development of Banwas deposit are estimated to increase ore production from existing 1.0 mtpa to 3.1 mtpa from HCL’s Rajasthan licences.