Turnaround in copper business
The copper business witnessed a turnaround this year and has started contributing to profitability. The company’s copper mines division went through a difficult period over the last few years, caused by longer- than-expected development phase resulting in higher costs and large accumulated losses. The company addressed the problem by commissioning the Nifty sulphide mines in Australia, one of the largest mines discoveries in past 10 years with a resource base of 685,000 tonnes and an expected life of 12 years. This helped the company turn around its copper business. The business is expected to contribute about 23-24% to the groups EBIT in FY07E against a negative contribution during the last three years.
Accelerated profitability from aluminium division
The aluminium business is expected to sustain its growth momentum and would do even better on the back of aggressive capacity expansion undertaken by it, which would boost sales volumes. Hindalco is expanding its Hirakut smelter from 65,000 tpa to 143,000 tpa and power capacity from 167.5 MW to 367.5 MW. Simultaneously, it is also setting up an alumina green-field project in Orissa with a refining capacity of 1500,000 tpa, smelter capacity of 325,000 tpa and power plant with a capacity 750 MW. This green-field project is likely to be commissioned over the next three years and has already received SEZ approval. These series of green-field projects would transform the company into a global sized player with a rated capacity of 1.5 million tonnes over the next 6 years.
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