Hind Zinc to raise output a third in 6-year plan

Hindustan Zinc, a subsidiary of London-based and India-focused Vedanta Resources, has laid out a strategy to increase production by 13% from 9 lakh tonne to 12 lakh tonne per annum over the next six years.

The company has earmarked a capital expenditure of $250 million per annum over the next six years to invest in developing further underground resources from its already producing mines and developing some new ones, too.

“The projects will be completed in six years and the benefits of growth projects will start flowing in from third year, while the expansion phase will continue till FY18-19,” said a company official during a conference call on Monday.

Hindustan Zinc, which mainly produces zinc, lead and silver (as a by-product of lead), recently increased its resource base to 332.3 million tonne per annum (mtpa) after conclusion of its exploration phase recently.

The official said the plan comprises developing a 3.75 mtpa underground mine at Rampura Agucha and expanding Sindesar Khurd mine from

2 mtpa to 3.75 mtpa, Zawar mines from 1.2 mtpa to 5 mtpa, Rajpura Dariba mine to 1.2 mtpa and Kayad mine to 1 mtpa. It will involve opening up of a small new mine at Bamnia Kalan in the Rajpura Dariba belt.

All these mines have a mine life of 25 years, which are constantly being explored and their reserve base is being expanded, thereby increasing their mine life, he said.

Analysts said while outlook for the price of zinc is stable now, demand is still not picking up and that is a concern for the company.

However, during the conference call, officials said zinc prices have stabilised and the short-term outlook for the metal in India is stable.

“The metal demand is expected to post double-digit growth in the next two years and the company is in a strong position to leverage this demand,”  an official said.

Hindustan Zinc also plans to reach an integrated silver production of 380-400 tonne by the next fiscal and may reach 500 tonne the year after, making it among the world’s top five silver producers.