Company chairman and managing director KVK Seshavataram told The Financial Express that the final proposal had been sent to the ministry of mines and PIB for their nod. The project would have foreign technical know-how.The new smelter was based on the demand-supply gap of zinc to the tune of 1.50 lakh tonnes by the end of the 10th Five Year Plan, said the chairman. By the year 2002, the demand-supply gap was likely to be in the region of 70,000 tonnes.

HZL had its market share of zinc rising to 57 per cent last year from 52 per cent in the previous year. Last year, HZL sold 1.41 lakh tonnes of zinc as against 1.36 lakh tonnes in the previous year. However the PSU's net profit during the year fell to Rs 151.15 crore from Rs 201.77 crore in the previous year.

The fall in the net profit, said Seshavataram, was due to the overall decline in the metal price in the world. Last year, theprices of the metal fell by 25 per cent compared to the previous year.

On the current price level of the metal, the chairman said it was certainly better. In March last, zinc was sold at $1130 per tonne (LME) and it rose to $1041 in May last. The current price hovered to around $1022 per tonne at LME. The future price scenario was quite promising.

The demand of zinc metal in the country had been rising by 5.78 per cent per annum. The metal was generally used in the galvanising industry.

On the on-going expansion of HZL's Debari and Vizag zinc smelters, the chairman said the work was in progress as per the schedule. The capacities of both the smelters were being raised by 10,000 tonnes per annum. Following the expansion the capacities of both the Debari and Vizag plants would rise to 55,000 tonnes per annum and 40,000 tonnes of per annum respectively.