Hindustan Zinc to invest Rs 12,000 crore in Rajasthan

India’s largest zinc and silver producer Hindustan Zinc Limited on Tuesday said its board has approved a proposal to expand its integrated refined metal capacity by 250 kilo tonnes per annum (ktpa) with an investment of Rs 12,000 crore over the next three years.

The new project is a part of the first phase of investments for doubling the company’s production capacity. Hindustan Zinc Limited, which was once a state-owned enterprise, targets to nearly double its metal production capacity to 2 million tonnes per annum by 2030. It is now a part of Anil Agarwal-led Vedanta Group.

The expansion plan approved by the company’s board includes the project for setting up a new 250 KTPA integrated smelter at Debari in Udaipur district of Rajasthan along with associated mines & mills expansion across its operations.

Demand for zinc globally is higher than supply. India’s demand for zinc is projected to double over the next 5-10 years, driven by significant investments in infrastructure, including steel production, according to the International Zinc Association.

Hindustan Zinc said in a statement that its expansion aligns with the strong growth expected in domestic and global steel demand. Zinc is primarily used in steel to protect it from corrosion.

"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 country self-reliant for zinc," Chief Executive Officer of Hindustan Zinc Limited Arun Misra said in a statement.

Since the government disinvested its stake in 2002 and subsequent acquisition by Vedanta Group, Hindustan Zinc’s zinc production has grown 4 times while silver output has surged by 20 times.

The company claims to be amongst the lowest cost zinc producers globally. It holds the second largest zinc reserves & resources globally with over 25 years of mine life. Hindustan Zinc holds around 77 per cent share in India’s primary zinc market.