Hindustan Zinc Ltd (HZL), part of the Vedanta group, will invest Rs 12,000 crore over the next three years, in the first phase of a plan to nearly double its integrated refined metal production capacity in five years, the company said on Tuesday.
The HZL board has approved the first-phase investments, which includes expanding its integrated refined metal capacity by 250 KTPA (kilotons per annum). The first phase also includes matching mines and mills capacity across multiple locations.
The company plans to raise its metal and silver capacities over the next five years, taking the total metal capacity to over 2,000 KTPA from 1,100 KTPA at present, and silver production capacity to 1,500 tonnes.
India’s demand for zinc is projected to double over the next five to ten years, driven by significant investments in infrastructure, including steel production, according to the International Zinc Association. HZL’s expansion aligns with the strong growth expected in domestic and global steel demand.
The board has also approved the project for setting up a new 250 KTPA integrated smelter at Debari in Udaipur in Rajasthan along with associated mines and mills expansion across its operations.
The company’s current metal production capacity stands at 1.1 million tonnes. The project is targeted to be completed in a period of 36 months.
This development is significant as it comes at the time of continued global deficit in the zinc market.
Since the government disinvested its stake in HZL in 2002 and subsequent acquisition of the company by Vedanta Group, the company’s zinc production has grown four times while silver production has grown more than 20 times. The company holds the second highest zinc reserves and resources globally with over 25 years of mine life.
“We are excited to announce this 2x growth project towards doubling our capacity across zinc, lead and silver, which is strategically aligned with the country’s expanding economic landscape, increasing demand opportunities and keeping the country self-reliant for zinc,” Arun Misra, CEO, said. “By closely matching the pace of national growth, we are confident that this will create significant value for our stakeholders and drive long-term success.”
HZL is the world’s largest integrated zinc producer and is amongst the top 5 silver producers globally. The company supplies to more than 40 countries and holds a market share of about 77% of the primary zinc market in India. The company has also won 10 critical mineral blocks put under the auction in five tranches by the Ministry of Mines.