SYDNEY, APR 7: Ownership of the century-old Mount Lyell copper mine in the island state of Tasmania passed to Indian copper producer Sterlite Industries (India) Ltd on Wednesday. Mumbai-based Sterlite rescued the mine from closure with the purchase.Tasmanian premier Jim Bacon and Sterlite group chairman Anil Agarwal signed the agreement at the mine's headquarters in Queenstown, bringing an end to months of negotiations.Sterlite's expenditure over the first 12 months would amount to about A $ 7.5 million (Rs 20.3 crore) on mine development and A $ 2.5 million (Rs 6.77 crore) on plant and equipment, Bacon said in a statement. The deal involves a subsidiary of Twin Star Holdings Ltd, the major shareholder in the Sterlite group, acquiring all of the shares in CMT.Ron Morosin, a director in corporate recovery of accounting firm KPMG, administrator of the Mount Lyell mine, said on Wednesday that consideration beyond development expenditure was involved in the sale, but declined to disclose actual figures.It is also not known how Sterlite would be financing the acquisition.Agarwal said he believed there was potential for operations to continue to the middle of next century, based on the development of a long-term mining plan.Sterlite is India's largest private sector copper smelter. It is also an aluminium smelter and manufactures and distributes copper cables, telecommunication cables and optical fibre. The company was recently in news for its aborted takeover bid on Indal which was foiled by Canadian multinational - Alcan. The company also faced problems in its Chennai plant on environmental grounds and was closed for few months.After a near-halving of the world copper price over the past two years, an administrator was appointed to Mt Lyell's operating company, Copper Mines of Tasmania (CMT), late last year when its parent company, Mount Lyell Mining Co Ltd said it had lost the financial support of its banker Citibank.Sterlite was wooed in the mine acquisition by the Tasmanian government as iteyed the threatened loss of 200 jobs in one of Australia's most economically depressed regions.Sterlite said on Wednesday the agreement opened the way for the new owners to recommence underground development that had been suspended for six months. It would re-establish a deep drilling programme to prove up mineral reserves at greater depth.It would keep the mine operational and develop the capacity of the mine and plant to three million tonnes of ore a year in a phased manner, it said.The Tasmanian government has not given full details of its arrangement with Sterlite, but has said that it will provide payroll tax and royalty reductions for five years. "The acquisition of CMT is a natural progression for Twin Star, providing the potential for cost savings for the copper concentrate used in Sterlite's operations, as well as providing greater certainty of supply," Agarwal said.The Indian company, which already takes concentrate from the mine for its 100,000 tonnes a year copper smelter in theMadras, was a natural buyer of the mine because of close synergies, a Tasmanian government official said.Mount Lyell's mill throughput for 1997/98 rose to 2.08 million tonnes from 1.8 million tonnes in 1996/97 as it sought income from production. The mine produced 24,560 tonnes of contained copper in the year.
