The Mines Ministry on Thursday said it will seek Cabinet's approval for its 20 per cent share sale programme for Hindustan Copper Ltd by the end of this fiscal.
"The Mines Ministry will seek Cabinet nod for 20 per cent share sale proposal in Hindustan Copper Ltd before March 31, 2010," Mines Secretary S S Nair said.
The two-phased share sale programme will see the government selling 10 per cent of its stake in the company and the miner raising fresh equity of the same quantity. Hindustan Copper Ltd (HCL) plans to fund its huge expansion programme by raising fresh equity, Nair said.
The first phase of share sale comprising 10 per cent equity would happen in the next financial year, she added.
"We are working out the exact quantum of stake the government will sell and the quantum of equity the company will raise in the 10 per cent share sale programme in the first tranche to happen in the next fiscal," she said.
The company's shares were trading at Rs 589.20, up 0.70 per cent on the BSE. Based on the share price the miner and the government could mop up an estimated Rs 5500 crore (Rs 55 billion) each.
However, the exact amount to be raised will depend on the issue price of the share sale, which will be a Follow-on Public Offer (FPO) for the listed entity. At present, the Centre holds 99.59 per cent stake in Hindustan Copper.
The Mines Ministry had cleared the FPO proposal last month after its board approved the same in December 2009.
Now it is in discussions with the Department of Disinvestment for working out the modalities of the FPO.
Further, the Mines Secretary said that the new bill to replace the existing legislation governing the mining sector is likely to be presented in the upcoming Budget session of Parliament.
"We have had series of consultations with different ministries on the new Mines and Minerals Development and Regulations Act. We are planning to present the Bill in the Budget session of Parliament," Nair added.
The Mines Ministry had last year proposed to introduce a new Act for the sector rather than amending the existing Mines and Minerals Development and Regulations Act, 1957, to support its new mineral policy, which is aimed at attracting huge Foreign Direct Investment in the mining space.
Global majors like ArcelorMittal, Posco, Rio Tinto, BHP Billiton have already proposed projects in the country, which is witnessing rapid growth in the sector. "The mining and quarrying sector is likely to see a growth of 11-12 per cent by the end of the current financial year," Nair said.
