Posted on March 24, 2025, by Niftynews
Hindustan Copper shares surged by 2.27% on March 24, reaching ₹235.15 per share on the NSE, following the announcement of a significant new contract. This contract, involving a partnership with JSW Group South West Mining Ltd. (SWML), is expected to generate ₹2,400 crore in revenue for the company over the next 20 years. The contract is structured on a revenue-sharing basis, marking a strategic step for Hindustan Copper in its effort to grow its business in the mining sector.
The partnership with SWML provides Hindustan Copper an opportunity to develop two copper mining blocks in Jharkhand—Rakha and Chapri—while generating substantial revenue over the long term. The deal is seen as a crucial milestone for Hindustan Copper shares, especially considering the company’s ongoing efforts to increase its copper production capacity and overall financial performance.
Revenue-Boosting Contract with SWML for Copper Mining in Jharkhand
The contract between Hindustan Copper and SWML is for the development of two copper mining blocks in Jharkhand—Rakha and Chapri. This agreement is valid for 20 years, with an option for a 10-year extension. The revenue-sharing model ensures that Hindustan Copper will earn a percentage of the revenue generated from the mines over the next two decades. Based on current estimates, the company anticipates earning approximately ₹2,400 crore from this venture, a figure that significantly enhances the potential value of Hindustan Copper shares in the years to come.
Hindustan Copper Shares: Revitalizing Jharkhand Operations
This contract is a pivotal development for Hindustan Copper, as it revitalizes the company’s operations in Jharkhand. The Rakha and Chapri mining blocks fall under a single mining lease owned by Hindustan Copper, with Rakha being an old mine that had been shut down nearly two decades ago. On the other hand, Chapri is a greenfield project, meaning it will be developed from scratch. Both mines are critical to Hindustan Copper’s long-term strategic plans, and their development is expected to lead to substantial gains for Hindustan Copper shares in the coming years.
Once the Rakha mine is fully operational, it is expected to have an ore capacity of 3 million tonnes per annum (MTPA), significantly boosting the company’s copper output. According to the plans, the mine should become partially operational by the second half of 2026-27, a milestone that will further strengthen investor confidence in Hindustan Copper shares.
Asset-Light Model for Hindustan Copper Shares Growth
The partnership between Hindustan Copper and SWML follows an asset-light model. This model is designed to reduce the financial burden on Hindustan Copper as the company will not need to make heavy capital investments in developing the mines. Instead, SWML will handle the capital expenditure and operational management of the mines. Hindustan Copper will provide technical support while receiving a share of the revenue generated by the mines. This business model allows Hindustan Copper to expand its mining operations while keeping its costs relatively low, ensuring that the company maintains profitability and enhances its long-term growth potential.
Strategic Importance for India’s Copper Supply
India continues to rely on copper imports to meet its domestic demand, especially as the use of copper in various sectors, such as electric vehicles, renewable energy infrastructure, construction, and telecommunications, continues to grow. The Rakha and Chapri mines represent a strategic opportunity for Hindustan Copper to contribute to the country’s copper production, reducing India’s dependency on copper imports. By increasing domestic copper supply, Hindustan Copper shares are poised to benefit from the growing demand in these sectors.
Investor Sentiment and Hindustan Copper Shares
Following the announcement of the contract, Hindustan Copper shares experienced a notable surge, with the stock price increasing by 2.27%. This positive movement reflects investor optimism about the future prospects of Hindustan Copper. With the company set to earn substantial revenue from the new contract and expand its production capacity, Hindustan Copper shares are expected to gain value, especially as copper demand in India continues to rise.
Despite some volatility in the stock over the past year, this new contract offers a clear growth opportunity for Hindustan Copper, which could lead to further gains in its stock price. Investors are paying close attention to the progress of the project and are optimistic that Hindustan Copper shares will continue to rise as the company ramps up its operations in Jharkhand.
Looking Ahead for Hindustan Copper Shares
As the contract between Hindustan Copper and SWML progresses, the company’s future outlook appears increasingly positive. With the potential to earn ₹2,400 crore in revenue over the next 20 years from the Jharkhand mining project, Hindustan Copper shares are expected to experience substantial growth. This contract not only enhances the company’s revenue streams but also positions Hindustan Copper as a key player in India’s copper production industry, which is expected to see significant growth due to rising demand in multiple sectors.
