NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News  » Business » AV Birla forms JVs to explore Aussie copper

AV Birla forms JVs to explore Aussie copper

September 25, 2003 12:37 IST

The Aditya Vikram Birla group, which has acquired a 20 million tonne copper mine in Australia, has formed two separate joint ventures with local partners to develop unexplored blocks.

The Birlas will have 60 per cent equity interest in the two ventures. Hindalco's managing director-designate Debu Bhattacharya said: "The mines come with several tenements which have proven resources but have not been commercially exploited. Hence, there are significant upsides to this acquisition."

The Mount Gordon copper block will be the group's second copper mine in Australia, which will raise its captive copper concentrate resources to almost of its requirement.

The group had bought the Mount Gordon copper mine in Queensland for A$21 million (about Rs 65 crore) through Birla Minerals, a wholly owned Australian subsidiary of group firm Hindalco. Hindalco is India's largest aluminium and copper maker.

The Mount Gordon mines have a capacity to produce 50,000 tonne of copper cathode every year using a patented technology.

But the Birlas plan to invest A$10 million to set up a converter to produce copper concentrate at Mount Gordon, and eventually stop manufacturing cathodes.

In January this year, the Birlas purchased the Nifty Copper Mine in Western Australia from Straits Resources.

Hindalco, which runs the group's copper business, is expanding its copper smelter capacity at Dahej in Gujarat to 250,000 tonne a year from 150,00, which should be completed by March 2004.

Birla would consider further expansion after the additional capacity is commissioned at both the copper and aluminium facilities.

"Our strategic intent in terms of captive mines is that we should have 25-40 per cent of total concentrate requirements coming from our own mines and the balance from long term contracts and from spot contracts," Bhattacharya said.

Owning the mines would help insulate the company from volatility in treatment and refining charges for copper concentrate, which are at their historic lows at present, Bhattacharya said.
BS Corporate Bureau in Mumbai