Hindustan Zinc Aims To Double Production Capacity With Rs 30,000-35,000 Crore Investment

Hindustan Zinc Ltd., a leading player in India’s mining sector, is set to double its metal production to two million tonnes annually, backed by a capital expenditure (capex) of Rs 30,000-35,000 crore over three to five years. This was announced by the company at its 59th Annual General Meeting on Aug. 25. 

The company’s vast reserves of 450 million tonnes of ore, equivalent to 30 million tonnes of metal, will underpin the achievement of this goal, according to CEO and Whole Time Director Arun Misra.

“All the ore that we have is around 450 million tonnes. If I take out the metal from it, it will be about 30 million tonnes and we are producing at 1 million tonnes. If you need to double that, that means the availability of resources below ground is not a question,” he said during a conversation with NDTV Profit.

He added, “The question is how quickly we can mine and take it out and logistics and things like that.”

The company is collaborating with an Australian mining consultant to boost operational efficiency by 30%, increasing annual mining capacity from 17 million tonnes to 21-22 million tonnes. Overall, the company needs to mine 35 million tonnes to produce 2 million tonnes of metal, he said. 

“For the balance amount, we will be expanding our mines both horizontally and also by depth,” Misra underscored.

The top executive highlighted the company’s expertise in underground tunnelling, noting that Hindustan Zinc constructs over 100 kilometres of tunnels annually.

The company’s ambition will be supported by new government regulations allowing a 10% increase in mining space for deep-seated ore bodies, he said. 

Financially, the company is well-positioned, with an estimated profit after tax of Rs 10,000 crore annually. This ensures there will be no need for debt financing, Misra emphasised.

“We make a profit after tax of about Rs 10,000 crore. So in four to five years, we will make Rs 50,000 crore. Even if we spend Rs 30,000 crore, we still have Rs 20,000 crore surplus. We don't need to take any debt for this,” the CEO said. 

All orders for new smelters, concentrators and mine expansion will be placed by the end of Nov. 2025, he noted.

“And when we double the quantity, of course, we'll remain below a thousand dollars per ton. That will be our biggest strength in the global market as well,” he concluded.

Shares of Hindustan Zinc were trading 2.66% up at Rs 464.95 apiece on the NSE at 2:32 p.m., while the benchmark Nifty50 was 0.41% down at 24,954.80.