Vedanta group company Hindustan Zinc (HZL) plans to invest ₹12,000 crore to double its production capacity across zinc, lead and silver.
The company has an existing smelting capacity of 1129 kilo tonnes per annum (ktpa), which includes 919 ktpa of zinc and 210 ktpa of lead, with a capacity utilisation of 93 per cent during FY25.
“As part of our 2x growth strategy, the Hindustan Zinc board has approved a plan to expand our integrated refined metal capacity by 250 ktpa, along with corresponding enhancements in mining and milling capacity. The total investment will be ₹12,000 crore,” the company said in a filing to the BSE, following its board meeting on Tuesday.
The new capacity, which is part of the first phase of expansion, will be set up at Debari in Rajasthan, where the company already has a zinc smelter. The expansion will be financed through a combination of internal accruals and debt, and is expected to be completed within 36 months.
Following the expansion, the company’s smelting capacity of zinc will increase to 1169 ktpa, taking the total smelting capacity of the company to 1379 ktpa. The company also plans to expand its silver refining capacity from the current 800 tonnes per annum to 830 tonnes per annum. Ore capacity is also expected to increase from 19.3 million tonnes per annum (mtpa) to 23.9 mtpa.
“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. 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,” said Arun Misra, chief executive officer, Hindustan Zinc.
In FY25, HZL, which has a 77 per cent market share in India’s primary zinc market, has clocked a revenue of ₹34,083 crore, up 18 per cent over the previous year. Following the expansion, the revenue is expected to grow to ₹42,000 crore.
The earnings before interest, taxes, depreciation and amortisation was ₹17,465 crore in FY25. It is expected to increase to ₹22,000 crore following the first phase of the expansion.
With crude steel capacity expected to increase from 205 mtpa in FY25 to 300 mtpa by FY30, the company is upbeat on the zinc demand to rise in the coming years as zinc is essential for galvanising steel.
HZL shares at ₹486.40 were down 5.19 per cent over the previous close on the BSE. Vedanta, which holds a 63.42 per cent stake in the company, is reportedly looking to dilute its stake in the company.