Hindustan Copper Ltd (HCL) is looking to get into the production of value-added products to shield itself from volatility in copper prices.

Copper prices have firmed up in the international markets and are currently ruling at $6,500 a tonne. The average price of copper in the same period last year was $5,200 a tonne.

According to Kailash Dhar Diwan, Chairman and Managing Director, HCL, the company plans to get into a joint venture agreement with Mishra Dhatu Nigam Limited (MIDHANI), a central public sector enterprise under the Ministry of Defence, for production of copper-nickel tubes. It has already signed an MoU with MIDHANI.

“There is a huge demand for copper-nickel tubes used in naval fighter ships, submarines, etc. These are currently being imported. There is a huge potential,” Diwan said at a press conference after the company’s Annual General Meeting here on Tuesday.

HCL is a primary copper producer. Though nickel production is small at present, the company hopes to scale it up to be able to produce the alloy.

HCL is in the process of conducting a technical due diligence to understand the exact nature and structure of the joint venture. However, as it stands, the firm will supply raw material, land and resources, and MIDHANI will provide the technical know-how.

HCL will invest close to ₹5,000 crore in the next 3-4 years to scale up its capacities in mining and manufacturing.

The company has an installed copper production capacity of 68,500 tonnes per annum.

It plans to set up a plant of 1 lakh tonnes per annum capacity to manufacture copper cathode through cost-effective hydro-metallurgy technology at an estimated investment of ₹3,025 crore.

“We have received the board approval for the investment and now the proposal has been sent to the Mines Ministry to obtain CCEA (Cabinet Committee on Economic Affairs) approval,” he said.

Work has already commenced on the company’s mining project in Malanjkhand in Chhattisgarh with an annual capacity of 50 lakh tonnes. The project entails an investment of ₹1,856 crore.

“The ore production from the underground mine is expected to commence from December 2018,” Diwan said.

HCL’s present mining capacity, which stands at 32 lakh tonnes per annum, will go up to 120 lakh tonnes per annum in the next 3-4 years.