India Resources enters administration

West Perth-based copper producer India Resources has entered administration after facing numerous delays at its Surda mine in India, including strikes due to employee payment issues.

Vaughan Strawbridge and Jason Tracy of Deloitte were appointed as voluntary administrators to India earlier this week. The pair will assess the company’s future viability and whether they can achieve a recapitalisation or sale of the business as a going concern.

The ASX-listed company was producing copper at its flagship Surda mine in India, but faced numerous strikes by mine, processing plant and construction workers during the year after the Indian government increased statutory wages by 40 per cent.

Hindustan Copper, an Indian government-owned enterprise, was operating the Surda mine for India Resources and was supposed to reimburse the company for the increase in wage – a factor India Resources said was necessary for the operation to maintain profitability.

However, the matter was unresolved as of last week, when India terminated its agreements with Hindustan and contracting company ShriRam EPC, which had been undertaking expansion work at Surda.

“We note that the appointment of administrators is limited to India Resources only and does not immediately affect India’s Australian or Indian subsidiaries, which remain under the control of those companies’ respective directors,” Mr Tracy said in a statement.

“We will provide all relevant updates directly to the market as soon as possible.”

India Resources shares have been suspended from trade since August last year, and were last worth 0.2 cents each.