Hindustan Zinc to Commission 2 New Mills with an investment of Rs 600 crore

New India’s only and the world’s leading Zinc producer, Hindustan Zinc, is all set to commission 2 new mills in Rajasthan with a joint capacity of 3 million tonnes of ore treatment with an investment of Rs. 600 crore.

Firstmill of 1.5million tonne is being commissioned at Zawar mines, about 45 km away from Udaipur. Zawar’s current ore treatment capacity is 2.5 million tonnes, and post setting up of newmill of 1.5 million tonnes, the ore treatment capacities would increase to 4.0 million tonnes.

Zawar has 4 mines with combined ore production capacity of 4 million tonneswhich is being expanded to 8 million tonnes in the next 5 years through mechanisation and switching over to tracklessmining.

Second mill of 1.5 million tonne is being commissioned at Sindesar Khurd mine in Rajsamand district in Rajasthan. Sindesar Khurd mine’s current ore treatment capacity is 4.5 million tonnes, and post commissioning of new mill of 1.5 million tonnes would increase to 6 million tonnes.

Sindesar Khurd mine is known for its silver production and is the most mechanized mine in India. The ore production at silver rich Sindesar Khurd mine is being expanded from the current capacity of 4.5 million tonnes to 6 million tonnes.

Both the new mills are expected to be commissioned by Q3 of FY 2019. After the commissioning of new mills, the ore treatment capacity will increase to 17.5 million tonnes from the current 14.5 million tonnes per annum.

Hindustan Zinc is expanding all its mines to meet the growing demand. Rajpura Dariba mine is being expanded to 1.5million tonnes from the current capacity of 0.9million tonnes. Zawar mine is all set to reach the capacity of 8 million tonnes in the next 5 years fromcurrent capacity of 4 million tonnes. The company’s Kayad mine in Ajmer has ore production capacity of 1 million tonnes and efforts are being made to expand this mine as well to 1.2Mt.

Hindustan Zinc is transitioning to become a fully Under-Ground Mining Company by FY 2019.

Rampura Agucha Mine of the Company, the world’s second largest zinc producing mine and responsible for 75% of company’s total output and also the only opencastmine in the portfolio, is graduallymoving to underground mine operations. The 955 meters depth shaft sinking work at Rampura AguchaMine has already been completed and the developmentmuck is in progress. The Shaft is likely to be commissioned by Q3 of FY 2019.

The shaft sinking work at Sindesar Khurd mine has already been completed and commissioned and the shaft has reached a depth of 1050meters. After the commissioning of new mills, the ore treatment capacity will increase to 14.7 million tonnes from the current 11 million tonnes per annum.

The CEO of Hindustan Zinc, Sunil Duggal informed that, “Setting up of new mills is part of our plan to match growing demand of Zinc in India.With+3 million tonnes of additional treatment of ore, we would be able to increase substantial volume of metal. We are on our course to produce 1.2 million tonnes of metal and moving steadily to produce 1.5 million tonnes. We are investing close to Rs. 600 crore to set up these two new mills. Our Fumer Plant is also on track for commissioning soon. This will give us technology to extract Lead and Silver from waste”

The Company is also setting up Fumer Plant to further improve recovery of metals from the slag which will also boost its metal production, particularly Lead-Silverwith an investment of Rs. 570 crore. The company has plans to put-up three Fumer plants overall at its locations in Rajasthan.

In the year 2016-17 Rampura Agucha mine produced ore both from open-cast and underground mine. The contribution of open-cast was 3.3 million tonnes and under-ground as 1.4 million tonnes. Rampura Agucha mine ore production capacity is expected to reach about 4.5million tonnes by 2019-20,which was 6.15 million tonnes as on 31stMarch 2017.

Though ore production capacity of all the mines put together is 12.20 Mtpa, the actual ore production in the year 2016-17 was 11.87 million tonnes. The company is aiming to expand the mine production levels to 13.10 mtpa in the current financial year and reaching to 17.50mtpa in the next three years, i.e. by FY 2020.

According to the metals and mining analyst, the grade at Rampura Agucha open cast mine is 13 percent and the under-ground mine would be also similar. Globally the average grade varies between 3-6 percent and that gives a huge advantage toHindustan Zinc in global market. Even the cost of production of Hindustan Zinc, which is about $800 per tonne, is 30 percent lower than that of the global peers.

Since disinvested in 2002, Hindustan Zinc has invested over USD 3 Billion towards its 4 phases of expansion programs to reach to metal production capacity of 1 million tonne.

The global zinc market is expected to grow at a CAGR of 3.96% during the period 2017- 2021. The zinc consumption in India is too increasing every year and eventually the issue of corrosion in the new sectors like automobiles, railways, use of galvanised re-bars in coastal structures, electricity distribution network, defense, agriculture, metro railways will also drive zinc consumption in India.

The additional +3 Million Tonne Mill Capacities to Ramp-Up Metal Production. Two New Shafts being commissioned at Rampura Agucha and Sindesar Khurd mines. Shaft at Sindesar Khurd has already been commissioned and shaft at Rampura Agucha will be commissioned by Q3 of FY 2019. This will increase ore production capacities. Rs. 3500 crore invested in building both the shafts.