CHAPTER - VI
D. Hindustan Copper Limited
1. Introduction
1.1 Hindustan Copper Limited (HCL) was incorporated on 9th November,
1967, under the Companies Act, 1956. It was established as a Government of India
Enterprise to take over from National Mineral Development Corporation Ltd., all plants,
projects, schemes and studies pertaining to the exploration and exploitation of copper
deposits, including smelting and refining, for fulfilling long-term objectives of the
nation, viz., development and growth of copper mining industry on sound lines and to
maximise indigenous production of copper metal. This is to be achieved by developing new
copper deposits, known or to be discovered, by adopting appropriate and modern
technologies.
1.2 The Government of India nationalised the only copper producing
company, Indian Copper Corporation Ltd. at Ghatsila in Bihar in March 1972 and handed over
its management and ownership to HCL.
1.3 In November 1982, the prestigious Malanjkhand Copper Project
comprising of a large and fully mechanised open pit mine and Concentrator plant was
dedicated to the nation.
1.4 The Continuous Cast Copper Rod plant at Taloja Copper Project of
Hindustan Copper Ltd. was commissioned in December, 1989 with an installed capacity of
60,000 tonnes. The company has selected Southwire SCR-2000 technology using natural gas as
fuel.
1.5 As on 30 November, 1999, the Authorised Capital of the Company
stood at Rs. 600 crores and the subscribed capital at Rs. 531.76 crores.
1.6 Present capacities of HCL's Mines and Smelters are given below :
Mines
| Location of Mines |
Ore Capacity |
| Khetri Copper Complex, Rajasthan |
18 lakh tonnes per annum |
| Indian Copper Complex, Bihar |
6 lakh tonnes per annum |
| Malanjkhand Copper Project, M.P. |
20 lakh tonnes per annum |
| Total |
44 lakh tonnes per annum |
Smelters
| Location of Smelters |
Metal Capacity |
| Khetri Copper Complex, Rajasthan |
31000 tonnes per annum |
| Indian Copper Complex, Bihar |
16500 tonnes per annum |
| Total |
47500 tonnes per annum |
CC Rod Plant
| Location of Plant |
Capacity |
| Taloja Copper Project, Maharashtra |
60,000 tonnes per annum |
2 Physical performance
2.1 The production of ore, metal in concentrates, refined copper
(cathode), and wirerod during the years 1997-98 to 1999-2000 are given below:
| Product |
1997-98 Actuals |
1998-99 Actuals |
Target for1999-2000 |
1999-2000 Actuals up to Dec. '99 |
1999-2000 Estimated |
| Ore Production('000 T) |
4496 |
4220 |
3741 |
2287 |
3143 |
| Metal in con- centrates (T) |
41440 |
38553 |
34300 |
24370 |
32800 |
| Refined Copper(Cathode) (T) |
42374 |
35834 |
39250 |
27268 |
36634 |
| Wirerod (Taloja) (T) |
31484 |
33025 |
30000 |
22260 |
29651 |
3 Financial Performance
3.1 Financial Performances of the company is given below
(Rs. in crore)
| Sl. No. |
Details |
Actuals for the previous 2 years 1998-99
1998-99 |
Target for 1999-2000 |
1999-2000 Actuals up to Dec '99(Prov.) |
1999-2000 Esti- mated |
| 1. |
Income |
807.33 |
678.61 |
570.95 |
357.77 |
630.22 |
| 2. |
Operating Cost |
849.70 |
791.61 |
633.97 |
382.26 |
664.62 |
| 3. |
Interest and transaction cost |
58.89 |
123.91 |
44.85 |
37.07 |
56.15 |
| 4. |
Depreciation and Amorti-sation |
68.46 |
62.11 |
60.20 |
44.65 |
57.33 |
| 5. |
Net Profit/(Loss) before income tax and dividend |
(169.72) |
(51.20) |
(168.07) |
(106.21) |
(147.88) |
4 Sales Performance
4.1 The Company achieved a total sale of 50826 tonnes of copper during
the year 1998-1999. The Company is likely to achieve a total sale of around 42600 tonnes
of copper during 1999-2000.
5 Proposed Disinvestment in HCL
5.1 The Central Government has recently approved the following
disinvestment strategy for HCL:
5.1.1 Phase I: The Khetri Unit of HCL along with Taloja Plant be
formed into a separate Company. The assets of these units may be valued and may form 49%
contribution from HCL in a new Company in which 51% equity may be injected by a strategic
partner.
5.1.2 Phase II : The remaining portion of HCL comprising the Indian
Copper Complex and the Malanjkhand Copper Project may be restructured by closure of
unviable mines in a phased manner with consequent separation of surplus manpower under
VRS. HCL may then look for one more strategic partner for 51% disinvestment in the
remainder of HCL.
5.2 As an advance action to the proposed disinvestment, the Company
appointed M/s. SBI Capital Markets Ltd. to evaluate its assets at KCC and TCP. The
valuation work has since been completed and the report is awaited.
6 Enhancement of Authorised Capital from Rs. 600 crores to Rs. 800 crores
6.1 The Shareholders of the Company in the 32nd Annual General Meeting
held on 8th December, 1999 approved the enhancement of the authorised share capital of the
Company from Rs. 600 crores to Rs. 800 crores comprising the following :
- 60,00,00,000 equity shares of Rs. 10/- each 600 crores
- l20,00,000 preference share of Rs. 1000 each 200 crores
6.2 This has been done mainly to enable the Company to issue
non-cumulative redeemable preference shares to the President of India for Rs. 180.73
crores being the amount of outstanding Government loan payable by HCL as on 31 March,
1998.
7 Closure of Unviable Mines
7.1 The Ministry of Labour has accorded their approval for closure of
Pathargorah and Kendadih Mines with effect from 31 January, 2000. Consequent upon the
successful closure of these mines about 1100 employees are expected to be separated.
8 Status Report on Implementation of Capital Restructuring of HCL
8.1 The Government had approved the following measures for capital
restructuring and turn-around of the company:
8.1.1 Waiver of interest on Government loan amounting to Rs. 167.43
crores as on 31 March, '98;
8.1.2 Conversion of Government loan of Rs. 180.73 crores into 7.5%
Non-cumulative Redeemable Preference Shares;
8.1.3 Issuance of Government guarantee of Rs. 75 crores to be utilised
for obtaining loan from financial institution for meeting part of cash losses;
8.1.4 Sanction of non-plan loan of Rs. 414 crores specifically for
separation of excess manpower.
8.2 The present status for the above support is as follows :
8.2.1 The Company has already accounted for waiver of Government
interest in its Annual Account for 1997-98 (18 months period ending 30 September, 1998;
8.2.2 The Comapny has recently obtained shareholders' approval for
issuance of Redeemable Preference Shares and the allotment of the same has been done;
8.2.3 On getting the Government guarantee of Rs. 75 crores the Company
has already received term loan of Rs. 70 crores from IDBI and disbursed the same towards
liquidating a part of statutory dues, bond liability and also international LCs for
purchase of concentrates/cathodes, etc.
8.2.4 Out of Rs. 414 crores non-plan loan for VRS, which was to be
given by the Govt. in a phased manner, Government has already released Rs. 160 crores. The
Company has spent this amount towards separation of excess manpower.
9 Expansion of Khetri Smelter and Refinery
9.1 HCL had earlier planned to expand the Khetri Smelter and Refinery
capacity from 31,000 tpa to 100,000 tpa. The proposal was awaiting PIB/CCEA clearance.
Meanwhile, due to the acute fund crisis this expansion proposal had to be kept in
abeyance. To turn around the Company, HCL intended to take up the debottlenecking and
technological upgradation of KCC Smelter and Refinery from out of its own resources with a
view to enhance its production capacity from 31,000 tpa to 45,000 tpa. The scheme will be
implemented in such a way that it will fit into the overall objective of raising the
capacity ultimately to 100,000 tpa. The Governemnt has given clearance to this proposal
vide their letter dated 17th July, 1998.
9.2 For implementation of the above scheme, discussions were held in December '97,
January '98 and September '98 with Outokumpu Engineering Contractors (OEC), Finland, the
original know-how supplier of the flash smelting technology at Khetri. Estimated cost of
the project will be about Rs. 49.50 crore.
9.3 OEC have submitted their draft agreement for technology transfer
and their offer for supply of engineering, equipment package and technical services for
Khetri Smelter. These are under scrutiny of HCL.
9.4 Regarding financial arrangement for the foreign exchange component
of the project, HCL has asked for certain clarifications from Leonia Corporate Bank,
Finland, who has submitted their offer for this purpose.
9.5 Due to the continuing losses, HCL is not in a position to fund the
debottlenecking/technical upgradation of KCC smelter and refinery entirely from out of its
own resources. Hence, HCL has requested for Plan support for part funding of project.
10 Energy conservation
10.1 Copper extraction is an energy intensive operation. Special
attention is given in making the operation energy efficient at all stages starting from
mining of ore to extraction of metal. Due to energy conservation awareness and regular
monitoring on consumption of all energy inputs, HCL have been able to achieve the
objective of energy conservation.
10.2 Constant thrust is also maintained on improvement of power
factor. Improvement in power factor during last two years and this year up to December '99
is tabulated below :
| Units |
Power factor1997-98 |
1998-99 |
1999-2000(Up to Dec '99) |
| KCC |
0.93 |
0.94 |
0.94 |
| ICC |
0.90 |
0.93 |
0.95 |
| MCP |
0.98 |
0.988 |
0.99 |
11 Computerisation
11.1 There has been further progress in computerisation in HCL during
the current year 1999-2000. Most of the system development work started in the year
1998-99, has been completed.
11.2 During the year connectivity has been established between Head
Office, different regional offices and projects.
11.3 The computerisation effort has been strengthened by further
decentralising. Some integrated system design and development is being carried out by
Systems Department with the idea of standardisation among the offices.
11.4 HCL has taken effective steps to counter the Y2K problem and has
achieved Y2K compliance in business computing.
12 Pollution control and Environment Management Efforts
12.1 Air and Water pollution control facilities and plants at all
units of the Company are operated regularly to maintain emissions within permissible
limits. Monitoring of treated effluents and gaseous emission are being carried out
regularly.
13 Salient aspects of the work being done by advisory boards/councils
13.1 Well established system of employees' participation in management
in the units as well as at corporate level are functioning. Shop Councils in each shop and
joint councils at unit levels besides bipartite committees on Safety, Canteen, Grievance
Handling, House allotment and Housekeeping are in existence and functioning properly.
These Committees are attended by Senior Executives and union leaders and they discuss
issues on production, productivity, welfare, training and other allied matters of
industrial value. Meetings are held at regular intervals-every month and every three
months at other committees quite often as the case may be.
13.2 At the corporate level, there are two apex committees. These are
National Joint Committee for Copper (NJCC) which deals with welfare, medical and social
facilities, wages and service conditions, etc., of workers for the Company as a whole on a
national level and meet at regular intervals. The other is Joint Consultative Committee
(JCC) which meets once in a quarter to discuss the issues on production and productivity,
cost control, yields, safety, pollution control measures, etc. These are attended by
Chairman-cum-Managing Director, Directors and all the unit Heads, Personnel Heads from the
management side and very senior leaders from the workmen side.
14 Research and Development Activities
14.1 Despite financial constraints, HCL in their smelters at KCC and
ICC, through inhouse expertise successfully developed and absorbed high matte grade copper
smelting operation and thereby reduced specific consumption of major inputs and increased
production and productivity from existing smelter installation. HCL has also absorbed
technology to treat high grade copper concentrate during the process.
15 Industrial Relations
15.1 The Industrial relations situation in different units of HCL was
by and large peaceful except the Indian Copper Complex, Ghatsila during the period under
review.
15.2 Indian Copper Complex
15.2.1 The situation is somewhat delicate at ICC. Following were
almost the regular features at ICC :
- resorting to agitation by the separate groups owing alliance to different unions and
political parties for rehabilitation and deployment of the remaining workmen of erstwhile
Mosaboni Mines, now closed;
- staging dharnas;
- organising gate meetings blocking the works gate;
- gheroaing the senior management representatives inside the room;
- delivering fiery speeches by the workers of Pathargora and Kendadih mines and issuing
press statements;
- demonstration arranged by a mass delegation of about 250 persons in front of HCL,
Calcutta.
15.2.2 All the above mentioned activities were carried out by both the
recognised unions at Moubhandar and Mosaboni; Jharkhand Copper Mazdoor Union, Moubhandar
Mazdoor Union; All Jharkhand Students' Union; Jharkhand Mukti Morcha; the Youth Congress,
ICC Bachao Sangharsh Samity in protest against delay in payment of wages; demanding
underground duty; discontinuance of service of casual workers; closure of Kendadih and
Pathargora mines; demanding restoration of facilities given to workers; supply of
concentrates; payment of full DA, supply of medicines to hospitals; non-development of
mines; etc.
15.3 Khetri Copper Complex
15.3.1 At KCC, the unrecognised unions have been holding gate
meetings, staging dharnas, picketting with slogan shoutings, etc., demanding payment of
salaries/wages; DA arrears, revision of wages and other suspended benefits. In spite of
good achievment in production and productivity the workmen in general got impatient
because of delay in payment of salary due to paucity of fund.
15.3.2 Due to acute financial crunch, the salary and wages of the
employees could not be paid in time. The employees have been paid salary/wages for the
month of September, 1999 on 13 to 21 December 1999.
16 Perspective Plan for women welfare
16.1 The women employees are given the following facilities:
16.1.1 They are provided with necessary training to equip them to
operate the new machine like computers, etc.
16.1.2 They are provided various in-company training on adult education, workers
development seminars and general development programmes periodically at unit training
centres. Women are also given in-service training.
16.1.3 Creche facilities, wherever necessary, are provided to the
women at the projects.
16.1.4 Committees headed by women employees for looking into the
grievance of women particularly in regard to sexual harassment at work place are
functioning.
17 Welfare of Tribals and Minorities
17.1 The main welfare activities in respect of Tribal and Minorities
are the part of 20 Point Programme of the Company. The following activities were
undertaken during the period from April to December, 1999 :
17.1.1 Clean Drinking Water
17.1.1.1 Repair of existing tubewells at different projects in order
to maintain clean drinking water. 390 persons were benefitted.
17.1.2 Health for All
17.1.2.1 Regular multi diagnostic camp at surrounding villages. 500
children were immunised and 120 persons were medically checked up.
17.1.3 Expansion of Education
17.1.3.1 Adult ladies including adivasi mahila are being provided
education in more than 8 Adult Education Centres run by the Company through Mahila Samaj
including free distribution of stationery and books under Expansion of Education.
18 Employment in the Company of
SC/ST (As on 31.12.1999)
| Group of Post |
No. of Employees |
No. of SC |
% of SC |
No. of ST |
% of ST |
| Group A |
1238 |
96 |
7.75 |
27 |
2.18 |
| Group B |
388 |
52 |
13.40 |
21 |
5.41 |
| Group C |
11629 |
1523 |
13.10 |
1832 |
15.75 |
| Group D |
1633 |
390 |
23.88 |
381 |
23.33 |
19 Mou rating
19.1 During the last two years the company has achieved MOU rating as
follows :
Year MOU Rating
1997-98 - Fair
1998-99 - Fair
20 Progressive Use of Hindi in Official Work
20.1 During the year 1999-2000, all the provisions of Official
Language Rules such as 100% compliance of Section 3(3), reply in Hindi to the letters
received in Hindi, increase in originating correspondence, organising of Hindi
fortnight/Hindi Diwas and workshops, etc., were completed. The following achievements were
made during the year :
20.1.1 Company's Malanjkhand Copper Project, Malanjkhand was declared
notified by the Government of India under O.L. Rule-10(4).
20.1.2 For the first time identity cards to 6000 employees of Khetri
Copper Complex were issued in Hindi.
20.1.3 A workshop on Official Language was organised at HO for senior
officials in which executives from the level of Director (Personnel) to Deputy Managers
participated.
20.1.4 With the words 'Tamra Bhawan' a neon sign board has been put on
the building of HO which remains switched on during the night.
20.1.5 A pestograph board has been installed at Head Office wherein a
new technical work along with its English version is displayed under 'Everyday a new word'
scheme.
20.1.6 A new scheme publishing Hindi literay work has been started
wherein a literary work of a renowned Hindi writer is published in our House Journal
'Tamra Sandesh' and its English version in 'Copper Calling'. This is as per the
recommend-ations of Parliamentary Committee on Official Language.
20.1.7 Twice in the year all the papers were presented in O.L. to the
Parliamentary Committee's visit to HCL.
20.1.8 HCL, HO was awarded with letter of appreciation for its
successful implementation of Official Language Policy by the Ministry of Home Affairs.
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