1.

Nature of Copper Business

Copper business like a typical natural resource business can be divided into three main
value chain segments
i. Exploration, Mining and Concentrator
This segment of value chain is a very high risk- high return segment. This
essentially involves locating and exploiting copper resources and selling
the products as concentrates whose price is linked to ME. This is the
most profitable of all segments. !eturn on investment is very high.
ii. "melting and !efining #
This segment is the least profitable in the chain. The segment basically
depends upon technology up gradation, production of byproducts and to
some extent on Treatment Charges and !efining Charges it gets at the
time of purchase of concentrates. The working capital re$uirements of
this segment are $uite substantial. !eturn on investment is Medium
iii. %ownstream units #
This is also a very profitable segment in the value chain. The business
involves purchase of cathode and converting this to various products like
!ods, Tubes, "trips, &oils, 'nsulated wires and cables, (inding wires etc.
The return on investment is high
). "uggested approach #
The company appears to have a aggressive growth strategy to en cash the mineral
resource of Tan*ania. The conse$uent approach would be to concentrate on Mines and
Concentrtor segment initially and then move on to "melting and !efining segment. The
early bird approach could catapult the company to higher levels keeping in view the
continued high prices in the +lobal Market and abundant untapped resources in the country.
, right "trategy duly translated into a short, medium and long term plan is essential for
this.. 't is essential to understand the following information and background to do this and
carry the pro-ect forward. 'nitial steps
't would be desirable to make an assessment of mineral resources available. The attached
$uestionnaire may be filled up for the initial feel. .ased upon the source, location, $uality
and estimated $uantity available we can decide about the processing facilities, make an
estimation about production volumes, plan for sales and pro-ect a cash flow. The surplus
cash can be reinvested back into the facility.
Typical cost of a "ulphide concentrator is /" 0 1233 to /" 0 4333 per ,nnual Tonne oc
cathodes. The economic capacity is typically 523,333 Mt
&or oxide ore typically 52 6 Copper, Electro leach7 Electro winning plant cost is /" 0 )333
to /" 0 )233 per ,nnual Tonne. .reak even capacities are much lower7
&or sulphide concentrator a typical 1333 Mt per day costs around /" 0 24 Milion.
Chinese offer much cheaper prices to the extent of 236
8owver. "ome newer technologies like ore sorter may be considered