Public sector Hindustan Copper is on the verge of signing a service contract with an Australian company, Monarch Gold, in a bid to re-open a copper mine in Jharkhand that was closed several years ago, reports Business Line.

This would be a service contract where Monarch Gold would invest in equipment, manpower and technology. Hindustan Copper will buy the copper concentrate at a fixed rate.

Perth-based Monarch Gold Mining Company, which was set up five years ago, is listed on the Australian stock exchange. Still in mineral exploration mode, it made a net loss of AUD 18.6 million in 2005-06.

The Surda mine was one of five that were closed between 1998 and 2003 as global copper prices plummeted and inflicted losses on the company. That prompted its inclusion in the disinvestment list of the Vajpayee Government, which dressed it for sale by closing down the costlier mines.

With the result there is no mine now functional at Ghatsila, where the company has a smelter of 16,500 tons a year of processed copper capacity and has to source the copper concentrate from its mine in Malanjkhand, Madhya Pradesh.

The company`s refining capacity is 47,500 tons of copper metal a year, 30,000 tons at Khetri and 16,500 tons at Ghatsila, near Jamshedpur. It produces about 30,000 tons of copper concentrate from its mines and imports the balance at a price that is much higher than what it costs to produce in India.

It had had accumulated losses of about Rs 7.23 billion as of Apr. 1, 2006, and a restructuring proposal is before the board for reconstruction of public sector enterprises.

Shares of the company closed at Rs 98.00, up by Rs 3.00, or 3.16% at the BSE. Total volume of shares traded was 18,000. (Monday 3:30 p.m)

source news : myiris.com