The Hindu Business Line : Hind Zinc plans to hike Rajasthan unit capacity

THE country's largest zinc and lead producer, Hindustan Zinc Ltd (HZL), now a Sterlite group company, is planning to increase the capacity of its smelter in Rajasthan by one lakh tonnes per annum (tpa).

The current installed capacity of the plant at Chanderiya in the State is 70,000 tonnes per annum, industry sources told Business Line.

According to them, HZL has already raised $75 million from overseas markets and has tied up the rest of the funds from domestic institutions and banks to finance the expansion project.

The total cost of the expansion could not be ascertained.

The company has licensed technology from Lurgi of Germany and has already given basic engineering contracts, they added.

A top company official refused to confirm or refute the news, only stating that "we will make an announcement at an appropriate time."

The HZL scrip has been steadily rising on the Bombay Stock Exchange (BSE) for about a month now.

Since the last week of April, the share price has moved up almost Rs 8 to close at Rs 24.80 on Monday, clocking a rise of almost 10 per cent from the previous close of Rs 22.55.

Volumes on the counter have also been in the range of a couple of lakh shares traded daily, significant considering the floating stock is only about five per cent of the total equity capital or about 2.2 crore shares.

The Sterlite group, which paid Rs 445 crore to the Government for a 25 per cent equity holding in the company last year, now controls almost 85 per cent of the total zinc production in the country through HZL, the only integrated primary producer of the metal.

The non-ferrous metal, used mainly by dry cell and galvanised steel makers, is currently trading at around $1,400 per tonne.

HZL's current installed capacity is about 1.7 lakh tonnes.

It has six lead-zinc mines with a combined annual capacity of 3.49 million tonnes, and four lead-zinc smelters.

The total annual domestic demand for the commodity is around 2.7 lakh tonnes, and supply is short by about 85 lakh tonnes, made good mostly by imports from China.

HZL's strength is its favourable operating efficiency, largely due to fully integrated operations from mining to production. The company has long-term leases for sourcing ore at its six mines.

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