Hindustan Zinc, which produced more than a million tonnes of mined metal in a year for the first time in FY22, is now exploring buying mining assets in other countries in order to increase its annual production to 2.5 million tonnes.
According to Hindustan Zinc chief executive Arun Misra, India’s largest integrated producer of zinc, lead, and silver is already looking into areas in Africa.
The company is trying to buy mining assets worth between 0.5 and 1 million tonnes per year in other countries, which would help it diversify its resources away from India.
“We will look at another 0.5-1 million tonnes globally simply because carrying goods across the globe to cater to the US or Europe would be difficult if we concentrate all production facilities in India,” Misra told news sources.
According to Misra, the company is also exploring buying new mining blocks in India in order to boost local production to 1.5 million tonnes per year. Rajasthan’s government is planning to sell new zinc and lead blocks later this year, which Hindustan Zinc NSE -3.47 percent will bid for.
The Vedanta Group is also looking to make zinc downstream alloys that are currently imported into India, which will help India reduce its reliance on exports while also improving its bottom line.
According to Misra, the company is constructing a 30,000-tonne-per-annum zinc alloys plant, which should be operational by the fourth quarter of this year.
The company was also on the verge of establishing a fertilizer plant to use the sulphuric acid it produces as a by-product.
The proposal was first revealed in 2015, but it was postponed due to local opposition in Rajasthan.
The plan was in its last phases of design, and Misra expects it to be approved by the board by June, after which construction will commence. By 2024, he expects the facility to be operational.
“It may only add a smidgeon to our net earnings. It stems from our desire to provide fertilizers for the state’s farmers,” he explained.
Misra, when asked about the growing costs of zinc metal on worldwide markets, said he doesn’t expect them to come down any time soon.
The Hindustan Zinc price has begun to rise
Zinc prices had begun to rise even before Russia’s invasion of Ukraine, he added, due to increasing energy prices and China’s reduction in manufacturing capacity to achieve its climate targets.
On the London Metal Exchange, the metal’s price for a tonne surpassed $4,500, compared to sub-$2,000 values two years earlier.
On Friday, Hindustan Zinc’s stock fell 1.37 percent to Rs 344.9 on the BSE. It has risen over 8% since the beginning of the year, compared to a 3% drop in the benchmark Sensex.