AV Birla group acquires Mount Gordon Copper Mine in Australia
By Our Corporate Bureau | 24 Sep 2003
Mumbai: The AV Birla group has acquired a second copper mine called Mount Gordon Copper Mine in Australia for a total consideration of A$ 21 million. The company had signed an agreement with the promoters of Mount Gordon Western Metals from Australia recently. The mine has been acquired through Birla Minerals Pty Ltd, a fully owned Australian subsidiary of Hindalco Industries. The group said that 6 per cent of the transaction cost will be funded by debt and the rest through equity. The acquisition is expected to be complete by 31 October 2003.
Says Aditya Birla group chairman Kumar Mangalam Birla: "The acquisition of Mount Gordon is a strategic step in our move to become a globally competitive, integrated copper player. It is a proactive step to entrench ownership operations. It has come at an opportune time, subsequent to the acquisition of Nifty Copper Mines earlier in 2003."
Together with the Nifty Copper Mine that the group acquired earlier in 2003, these mines will cater to more than one-third of the group's copper concentrate requirements. Hindalco will spend A$ 10 million to convert the cathode facility at Mount Gordon to a concentrate facility. The company's managing director-designate Debu Bhattacharya says this will give it an advantage in a tight concentrate market.
"It gives us an advantage that we will get a concentrate production that will start in six to eight months at a time when the market conditions are tough," he adds. Hindalco's stated intention is to source between 25 and 40 per cent of its copper from captive mines. Besides Nifty and Mount Gordon, the company is said to be on the lookout for more mines.
"We believe our experience in Nifty Mine gives us the confidence to go in for this. We would like to consolidate these two, before going for a third one. But if a good option comes along we will certainly look at it," says Bhattacharya.
He says the acquisition of Mount Gordon accords the group a significant opportunity to capture a greater portion of the copper value chain soon after having acquired Nifty Copper Mine. "It will enable us to further consolidate our standing in the Australian copper industry. Our intent is to establish global copper operations in Australia."
