Jhagadia Copper Ltd Management Discussions

JHAGADIA COPPER LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS Overview: During the year, the plant has operated at 25.30% capacity (peaked to 34.46%) with 12,675 MT copper cathodes production of consistent quality conforming to the LME Grade A specifications. During the year, the flexibility of the plant in processing various types of raw materials continued to be demonstrated by processing reverts; concentrates with high insolubles, irony copper, copper dross, copper cake, blister and other copper bearing raw materials. During the year, the sale of copper cathodes continued at par with the market premium, although not yet registered with LME. Absorption of Technology The company has successfully absorbed technology of smelting of various raw materials through Top Blown Rotary Converter (Kaldo) and Refining technologies envisaged in the design. Kaldo and Converter have been successfully operated with different types of raw materials. The Refinery has consistently operated at higher current efficiency (98.05%) and time efficiency (96.08%) than envisaged in the design operating parameters (current efficiency 96% and time efficiency 95%). Status of Working Capital Finance During the year, the company continued to face shortage of working capital finance due to higher LME prices of copper upto third quarter of 2008 and the lower production levels as sufficient quantities of the medium grade raw materials at favorable treatment / refining charges and high grade raw materials at higher discounts could not be procured due to adverse market conditions. Raw Materials Market Scenario The raw materials used by the company are different in nature as-compared to the raw materials used by primary copper smelters. However, the treatment and refining charges (TC/RCs) and discounts of the raw materials used by the company have direct linkages with the TC/RCs of concentrates used by primary copper smelters. During the year, the global economic melt down and lower TC/RCs and discounts over LME had adversely affected the company as the world market of raw materials remained tight. Safety and Occupational Health During the year, plant operated with Zero Accident because of managements continued focus and commitment. The regular in-house training programs were carried put to maintain highest standards of the safety consciousness. The departmental and central safety committee meetings were regularly conducted. The efforts of the company in maintaining highest standards of safety and health were recognized by upgradation of the OHSAS 18001-1999 Standard to OHSAS 18001-2007 Standard. During the year, health checks were carried out for all the employees and no occupational disease was detected. Environmental Issues During the year, emphasis and commitment to maintain sound environmental management practices for treatment of waste gases, water and solid / hazardous wastes were continued. The treatment of waste gases from furnace through scrubber or through bag filters was continued for ensuring adherence to the norms set by Environment Authorities. The plant was operated with Zero Discharge. The ISO 14001: 2004 certification by DNV was continued by successfully maintaining the environment standards. Energy Conservation During the year, several energy conservation projects were taken up. Few of the projects taken up were as under. (a) Installation of variable frequency drive in cooling water pumps at main cooling tower to take care of different flow requirements at optimum energy consumption. (b) Anode furnace combustion air fans were provided with the variable frequency drive to save energy consumption. (c) Refinery ventilation fans were provided with the variable speed drive to get significant saving on energy consumption. Research and Development During the year, Seminal Research & Development projects having relevance to the existing operations were undertaken. Further few projects have-been implemented in plant to improve operational efficiencies and reduce cost.