NEW INITIATIVE - AN INSIGHT WITH ASHISH VIDYARTHI

Mr. Ashish Vidyarthi's interaction was part of  Hindustan Zinc initiative – “An Insight” – held at Hindustan Zinc Auditorium on 22nd September, 2017 in Udaipur...


"Zinda Hoon Mai" - Break the routine and discover new sides of yourself. Don't try to be like someone…Be an amazing version of the unique you”, said Mr. Ashish Vidyarthi during his interaction with employees of Hindustan Zinc on 22nd September, 2017 at Hindustan Zinc Auditorium. Mr. Vidyarthi was in Udaipur to deliver a lecture under the initiative launched by Hindustan Zinc – “An Insight”.
A versatile actor who has done more than 200 films in 12 languages has a unique style of presentation that made the entire 300 audience present in Hindustan Zinc auditorium, Udaipur spellbound. The art of interaction clubbed with change of expressions and body language made the interaction even more interesting and communicative.
During his interaction, Mr. Vidyarthi emphasized on not being afraid to make mistakes because mistakes help to learn and discover new aspects about oneself. His humorous anecdotes encouraged to look at the positive side of life and be grateful for what one has achieved. Mr. Vidyarthi pointed out that one should own their life and cherish the present.
There were many occasions when participants realized how daily routine of their life is impacting their happiness. “One has to believe that he is alive and has a purpose of being in this life”, he said.
The interaction was webcast to reach out to all employees of Hindustan Zinc and also webcast live on Facebook page of the company. The interaction reached over 100,000 people including employees.
Mr. Sunil Duggal - CEO, HZL during the program said, “We often forget about living in the moment and usually focus on tomorrow. Live today and tomorrow would be lived. It is important for everyone to know that they have a purpose in life and that should be fulfilled."
Mr. Vidyarthi is winner of National Film Award, Filmfare Award and Star Screen Award. He is also Founder of the company Avid Miner, an enterprise that engages corporates and organizations with out-of-the-box interactive modules. 


BEING SAFE - AN INTERACTIVE WORKSHOP




"Being Safe" initiative has been quite effective in reducing stress, bringing-in a sense of responsibility not just at the workplace but also towards the families of the employees... 

Safety has always been a priority for Hindustan Zinc. The initiative “Being Safe” by Corporate Communication conveys on-the-job and off-the-job safety to the employees of the Company. By using live interactive tools, discussion of case studies and screening in-house made safety films, the initiative conveys the importance of being safe for themselves and their families. In this quarter, “Being Safe” conducted 2 workshops for employees at Chanderiya Smelting Complex and Zawar Mines and interacted with over 200 employees to bring about a sense of responsibility for safety among them.
Rajasthan ranks 5th in India in terms of Road Accidents. Road Safety has been taken for granted where many do not follow traffic rules and do not wear helmets or belts while driving. Risk factor has become a source of thrill for not just adults but for children too. “Being Safe” thus extended its focus on children where Corporate Communication conducted 3 workshops at Central Academy, Chittorgarh, Ryan International, Udaipur and DAV school, Zawar, interacting with over 300 students in the quarter. Children would not only craft the future of India but are also instrumental in bringing change in the system and mind-set. The Safety Interactive Workshop brought up enlightened young individuals who promised to follow the path of Being Safe.
“Being Safe” has till now interacted with more than 2500 employees and children and has been successful in inculcating the value of life and bringing employees closer to the management.




INNOVATORS OF ZINC -SMALL CHANGES USUALLY ADD UP TO HUGE RESULTS...



Reducing Breakdowns by In-house designing of Loader bucket…
Komatsu Loader WA900 having 13 cubic meter bucket capacity, is one of the largest Loaders used in Mining Industry. At Rampura Agucha Open Cast Mine, this Loader is used at primary crusher pad for ore feeding.  But RA-OC team has been a facing a major challenge in the Loader, its tooth points would often wear off from the mounting pin and fall into crusher resulting in crusher breakdown. Also, the life of tooth point was very short.
To reduce the crusher breakdown and to increase the life of tooth point of the bucket, Heavy Earth Moving Machine (HEMM) team consisting Mr. Krishankant Tripathi (Executive- HEMM), Mr. Sachin Kumar (Engineer- Mining Machinery) and Mr. Arjun Kumar (HOD-HEMM) took the challenge to change the design of the Loader bucket. After studying the technicalities involved, the complete bucket front lip was re-designed by the team indigenously and manufactured through local agency. Tooth Point of different design was also fitted in the bucket.
The results were remarkable. Since then, there is not a single case of premature wearing of tooth point in the new design of bucket. The life of new tooth point is twice the original. The cost of ground engaging tools for the equipment went down from Rs. 1538/ hour in FY 2015-16 to only Rs. 415/ hour in FY 2016-17 which gave a direct saving of Rs. 36 lakh y-o-y and, eliminated indirect losses due to breakdown of the equipment and crusher. 

INNOVATORS OF ZINC - WHAT GETS MEASURED; GETS MANAGED…



Induced Fan Duct is a critical equipment of Boiler in Captive Power Plant (CPP) and its malfunction would lead to breakdown of boiler. CPP at Chanderiya has been facing a major challenge of erosion of duct parts of Induced Draft Fan, leading to higher power consumption, thereby, increasing COP.
To eliminate the erosion, Captive Power Plant team comprising Mr. Mahender Singh Rathore (Manager -  Engineer and Planning), Mr. Seela Satyanarayana (Associate Manager - Electrical), Mr. Mohd. Parvez (Associate Manager - Power), Mr. Chandi Das (Associate Manager - Electrical) and Mr. Binu Raphael (AGM - Asset Optimisation) conducted a detailed “Computational Fluid Dynamics” analysis by taking measurement of pressure drop across the duct. Huge pressure drop across the duct was found to be the main reason of erosion during the analysis. Team then rectified the flow path of induced air by modifying the design of the duct.
Team efforts paid result. After design modification, the erosion of duct got reduced and power saving of around 100KW/Unit was achieved leading to cost saving of Rs.
30 lakhs per annum. This has been horizontally implemented across all units of HZL.

ASK FOR ZINC - FOREVER IN BLOOM – LOTUS TEMPLE IN DELHI…


The Bahai or Lotus Temple in Delhi, completed in the year 1986, is a monumental structure shaped as the petals of the lotus flower. It was built by a renowned Canadian architect named Fariborz Sahba and took 10 years for planning the structure of the temple and implementing it.
The petals of the Lotus temple of Delhi are clad in white marble panels, and their structure has been reinforced with 300 tonnes of galvanized bars to avoid the risk of rust staining on the white concrete body. This also helped to maintain the pristine appearance of the monument and avoid cracking which is prevalent in Delhi because of the humid conditions of the city. Also, the reinforcement used in the white concrete shells, the binding wires and the connecting cables are entirely galvanized so as to prevent the long-term effects of rusting and to guarantee the life of the delicate shell structure of the petals.
Lotus temple is one of the best pieces of art of olden times, that has stood the test of time till today. The monument remains one of the major attractions and a prominent landmark which has won numerous architectural awards. Hundreds of millions of devotees from across the world have already visited Lotus temple and the structure is made to see many more millions in the coming hundreds of years.
Another example of “we all have ZINC in our lives…”

ASK FOR ZINC - SOME IGNORANCES ARE NOT BLISS

Though we started this initiative to explore usages of Zinc, but with every research on Zinc, our trust on this metal is only increasing. My curiosity has lead me to search for Zinc in everything I use or consume. It is not about identifying the health problems or corrosion issues, it's about why certain health problems are preventable or early curable, and why, corrosion did not take place across number of buildings, bridges, electrical poles, automobiles and temples in so many decades.
We don't use toothpaste anymore that does not have Zinc. While taking any multi-vitamin, antiseptic, oral care medicines, we make sure it has Zinc in it. It is a tonic for my skin, nutrition, strength to paints and for healthy hair. While buying any steel item, post verifying SS symbol, the next question is whether it has Zinc coating or not. 
We have become spokespersons for Zinc. Our watches, mobiles and other equipment, using batteries, has to have only Zinc batteries. The usage of Zinc in the Moon Buggy and in Spacecrafts is only justification of the trust and respect this metal governs across various usages.
For once, I am continuously exploring properties and usages of Zinc, and not because I work for Hindustan Zinc.
Why this metal is the 4th most sought after metal is now understood. Why mankind searched for it in ancient times so rigorously is also known now. The only difference is, in the ancient times the wisdom was more predominant than today, as today, the benefits of Zinc have been further identified and explored.
And now since I know, I ASK FOR ZINC. Truly, Zinc is in our lives. So live with it, why without it.
Wondering, even after knowing so much, approximately 1/3rd of the world's population lives in areas of high-risk of Zinc deficiency.
Some ignorances are not bliss…
 By Pavan Kaushik

DEVELOPING INDIA WITH A COLLECTIVE SOCIAL RESPONSIBILITY


When corporate come forward to drive programs for community welfare, it is essential to get support from all sectors…

Albert Einstein said - “The value of a man should be seen in what he gives and not in what he is able to receive”.
These values of giving have their roots going deep to mythological times where Karna, one of the central characters in the Hindu epic Mahabharata was a man with a phenomenal sense of integrity and generosity. Even Lord Indra who tricked him by disguising as a Brahmin for his Kavach and Kundal that made him invincible was amazed at Karna's capacity to give away anything asked for. Even though he had alliance with Kauravas during the war, he is always remembered as 'Daanveer Karna'. Also, 'Maharshi Dadhichi', one of the greatest saints of all times donated his bones for the welfare of the community, a force that still drives Indian philanthropy.
We all have grown hearing such stories on power of giving and understanding the necessity of community development and humanistic approach in every way of life. Irrespective of profession, high or low profile, there are people who have made best of their capabilities provided to them for development of society.
When it comes to community service or popularly known as 'Social Responsibility', it has always been seen as responsibility of government and main source for social-economic development of society, particularly in rural India. When Panchayati Raj was introduced, it brought in rural independence in India. With the advent of technologies and setting-up of big industries in remote rural areas, it led to generation of employment thus giving economic boost to villages where Agriculture has always been the main source of economy. It led to less migration and availability of growth opportunities in villages. Gradually with time, population spurted in both villages & cities and with this their necessities also increased making it crucial for the Government to allow Corporates to pitch in for the Greater Good.
This is when Social Responsibility transformed to 'Corporate Social Responsibility'. There are some respected and successful organizations that primarily work towards bringing socio-economic independence in rural communities with the focus on child care, education, health, nutrition, employment, women empowerment, infrastructure development, to name a few. In 2015-16, 5097 companies have invested Rs. 9822 crores in India for social good. This spend is testimony of increased involvement of private sector in social development by contributing in generation of employment and eradication of poverty in country. With Government, corporates and supporting NGOs coming together for nation building, it becomes imperative for communities and individual to take the ownership and work towards 'Collective Social Responsibility' to achieve a well-defined objective. It is important to make the community responsible thus requires more community participation.
To work on long term, sustainable solutions based on the need of the communities, there is a need to underline high impact CSR programs like child care, education, healthcare, women empowerment, skill development, sanitation and agriculture & livestock. For immediate attention, 'child care', 'women empowerment' and 'Skill development' should become part of Nation Development Projects.
There are 7.5 crore underprivileged children in rural areas who need environment to grow and nurture into responsible human resource. We have to build future of India by strengthening their foundation by providing them proper nutrition, health and education.
Women, constituting 48% of total population of country has time and again proven, when we empower them, they empower their family that empowers village/city and ultimately empowering whole nation. Rural women have immense potential to develop their skills and make that a regular source of livelihood. All they need is encouragement and skill development program to move them towards micro-enterprise.
India has target of creating 500 million skilled workers by 2022. It is essential to tap this resource who is primarily those, who could not study due to lack of facilities in their village or lack of interest. There is a need to increase their capacities through professional vocational training programs thus making them resourceful manpower.
With corporate's engagement and communities' support, Government can execute these programs by assigning each corporate with one focus area to address and same will be weaved into their Business Plan. This approach will give undivided attention of Corporate that will align all their resources on the execution of one project, ultimately impacting the society at a National Level. The other approach is that Government allows corporates to highlight 5 flagship programs in the state they are operating and start engaging their resources on the implementation of these programs for the benefit of the community. It is to understand that when corporate come forward to drive the programs for community welfare, it is essential to get support from all sectors including Government. Corporate also need a cushion in smooth running of their Businesses as they are ultimately contributing in boosting the economy and job creation. They should be given equal opportunities to flourish by introducing transparent policies, simple regulatory framework with an offering of 10% tax rebate in running businesses. This money gained is only to be further utilized and reinvested for the Greater Good.
For a developing nation like India, it is important to recognize & strengthen the grass-root level and taking forward the whole nation together in making it the powerhouse of socio-economic development.

By Pavan Kaushik
Head - Corporate Communication
Hindustan Zinc

SHIKSHA SAMBAL – BRIDGING GAPS IN RURAL SCHOOL EDUCATION

·         Hindustan Zinc’s Shiksha Sambal Program since 2008 has been providing classes in Maths, Science & English in Government Schools
  •  So far, over 50000 rural & tribal students have been benefitted

When Geeta was born in a farmer’s house in Bhilwara in Rajasthan, unlike many of the rural families, the parents decided to provide her the best of education. Geeta also had an elder brother, Dheeraj, who was studying in nearby government school in 2nd standard. As the children were growing, the small girl also started showing interest in education. She would keep playing with his brother’s books and admire the pictures. When she became eligible for pre-school, she started going to nearby Anganwadi centre.
The parents were very happy since both the children were getting education.
The problem started when Dheeraj reached class 10th and wanted to pursue Science. The school had no teacher to teach the subject. Not Just Science, even for Maths and English, teachers were not available. Dheeraj was disheartened. He had two options, either to change his subjects or search for some school outside the city. He was not ready to give up studies. As Dheeraj’s father was not financially sound, he could not afford sending Dheeraj to another city for schooling. Security and safety was another concern for the family.
Like Dheeraj, there were many students who wanted to study Science, Maths and English but they could not find a solution. Not just the boys, many girls of the village wanted to pursue studies further and choose these subjects.
Geeta, who was still young had the same fear. She was a brilliant student and wanted to pursue Engineering or Medical Science. But after knowing all this, her dreams were getting shattered. She started losing interest in education.
The matter went to elders of the village and they met the Principal of the school. But the Principal showed his inability and could only express regret.
Then the solution came from a Business House that was located near their village. One of their representatives met the school Principal. After hearing everything meeting with the students, the Management of this Business House introduced them to a project for these students. This project would provide trained teachers to the students who would teach them English, Science and Maths subjects throughout the year and year after year which will get the recognition as part of school syllabus. The dreams of all these children were reinstated.
The Project was “Shiksha Sambal” and the Business House was Hindustan Zinc.
“For a tree to be strong and upright, its roots have to be firm”. Similarly, schools are a cornerstone in any student’s lives to cultivate healthy thought process and groom intellectual abilities.
Schools in rural areas have their own challenges in terms of providing education to students. The government has provided schools in rural areas but the point is how well these schools are equipped to provide quality education. Students appearing for Senior Secondary education suffer the most. The teachers are not available for certain subjects and thus either they have to leave those subjects and choose the subjects available in the school or even change the stream of education to get qualified and experienced teachers. It is evenly difficult to convince villagers to send their children to schools, particularly the girls.  
Government is very keen to provide the best possible facilities in village schools. But they do need the support of people, here, teachers, to run these schools successfully. This is when Corporates and Government should come together for the holistic development of communities by aiding the facilities and financial securities.
Through Shiksha Sambal, Hindustan Zinc provides a platform that empowers rural students to pursue their dream of obtaining higher education and joining prestigious institutions to play an important role in development/ progress of the country in future.
After the identification of the need of schools in terms of number of qualified teachers, CSR team deputed qualified teachers from external sources in respective schools for the students appearing for Board Examination. These teachers are educated youths in nearby villages who were unemployed and struggling to get jobs, in spite of possessing a degree.
In 2016, Hindustan Zinc partnered with Vidya Bhawan Society, Udaipur, for effective implementation of this program.
Shiksha Sambal believes that conceptual clarity is the foundation of all learning and is essential for doing well in examinations. Such clarity will come through a well-rounded studying approach that includes comprehension, careful observation, classification, conducting experiments, peer group activities and an unending process of enquiry. Languages of children have an important role in building conceptual clarity, learning other languages and cognitive growth. Performance in Mathematics will improve with the understanding of basic mathematical concepts. And the only way to really understand Science and score in it is by conducting experiments on their own. In each case, the programme pitches one point above the cognitive levels of children.
Regular orientation and subject-specific workshops are also being organized under Shiksha Sambal wherein it also focuses on conceptual mapping of each chapter of the given subjects and makes plans for systematic interventions with teachers and students. Preparing worksheets that could be used with children is an ongoing process; these materials help in understanding the concepts and in attempting examination questions successfully.
Another important component of Shiksha Sambal has been the Summer Learning Camps (SLCs). This year, 7 Summer Camps were organized in 5 districts of Rajasthan for more than 750 rural students who are appearing for 10th standard Board Examination this year. The first residential summer camp was organized last year in Udaipur that saw participation by around 70 rural students. Sighting the success of last year’s camp, this year, more than 200 students actively participated where about 50% of them were girls from villages around all 7 business locations including Pantnagar. Around 12-15 students from last year’s camp also participated this year as ‘Captains’ to aid in managing the current batch.
The company has also provided help in building infrastructure like science laboratories, well stocked library, playground, computer laboratory and also classrooms. There are many activities, such as solving worksheets, doing science experiments and using library books to deepen the conceptual understanding of the students.
In the recently released Board Exam results for 10th standard, there have been remarkable improvements in several of the Shiksha Sambal schools. Kanpur school (Zawar) which last year had a pass percentage of only 11%, now has a pass percentage of 91% in 2016-17. Similar improvements can be seen in other schools. Putholi (35% to 73%), Padla (32% to 54%), Medta (44% to 64%), Zawar (16% to 36%), Pandoli (37% to 60%), Kashmor (57% to 100%) and Soniyana (45% to 79%).
Shiksha Sambal is reaching out to more than 57 schools in 5 districts of Rajasthan - Chittorgarh, Bhilwara, Rajsamand and Udaipur. By now, more than 6000 students have been benefited wherein 150 teachers, 80 Field Instructors (FIs), 50 HZL employee-volunteers and resource persons from Vidya Bhawan Society are engaged in strengthening the quality of education.

FINANCIAL CHRONICLE - THE SILVER MINING BY SUNIL DUGGAL - CEO, HZL

If we add the amount of solar energy that is absorbed by the earth's atmosphere, land and oceans every year, we end up with approximately 3,850,000 EJ (exajoules or 10^18 joules). To put it in more understandable terms, this amount of energy is equivalent to: 2.7 million earthquakes of the same size as the Tohoku earthquake in Japan (2011); 40,000 times the total energy consumption in the United States; 8,000 times the total consumption in the whole world; 40 per cent of the energy that is required to heat the entire volume of water we have on earth by 1°Celsius. Every square metre of our planet receives around 1,366 watts of direct solar radiation.
In America, one solar panel system is installed every four minutes. NASA is currently working on a solar-powered aircraft.
Globally, California is home to the largest solar power plant in the world, located in the Mojave Desert. It spans 1,000 acres. California also dominates the solar power market, with a market share of 44 per cent in 2015. California, Arizona, and North Carolina are the top three US states for solar power, based on the amount of cumulative solar electric capacity installed. There are now nine states in the US where 100 per cent of new electrical energy comes from solar power. In terms of employment generation, more than 200,000 Americans currently work in the solar power industry. That number is expected to climb to 420,000 by 2020.
India is currently 100 per cent importer of solar parts where Silver is used. The major countries from where it is being imported are China and Japan. Taking forward the vision of our prime minister Narendra Modi to produce 100 GW of solar energy by 2022, and producing solar parts, India's consumption of Silver will be all set to increase by about 4,000 tonnes. It is also true that 40 tonnes of Silver is required to produce panels that would generate 1GW of solar power.
Technically speaking, Silver is a primary ingredient in photovoltaic cells, and 90 per cent of crystalline silicon photovoltaic cells use Silver paste. When sunlight hits the silicon cell it generates electrons. The Silver used in the cell works as a conductor to collect these electrons in order to form a useful electric current. The Silver then transports the electricity out of the cell so that it can be used. Further, the conductive nature of Silver enhances the reflection of the sunlight to improve the energy that is collected. Therefore, if it wasn't for Silver, solar wouldn't be as efficient in turning sunlight into energy.

But, where is the Silver in India. Have we explored Silver in India? Silver is giving jitters to the increasing solar demand in India. Silver is found in zinc-lead mines and there has been no new large mine explored in India in over a decade. Exploring a mine takes its own time and developing a mine takes 3-5 years. Either we rely on imports or we develop our own resources is the decision that India needs to take.
India is the largest consumer and importer of Silver in the world, having a share of about 21 per cent of global Silver demand though it produces only 6-8 per cent of its consumption requirement. The current Silver import in India is touching 7,000 tonnes and here in India we produce close to 500 tonnes which maximum can be extended to 1,000 tonnes in coming 3-5 years, with expansion of Hindustan Zinc mines that produces over 95 per cent of India's Silver. Globally, the highest usage of Silver is industrial fabrication (55 per cent), followed by coins and bars (20 per cent) and jewellery (20 per cent) and lastly Silverware (5 per cent). In India, the highest usage of Silver is jewellery (38 per cent), followed by coins and bars (22 per cent) and lastly Silverware (20 per cent) and industrial fabrication (20 per cent), as per World Silver Institute.
As compared to the world, India has been slow towards utilisation of Silver for industrial usage with mere 20 per cent, as compared to global usage. Though we are growing in terms of utilisation of Silver in jewellery and Silverware, the real boost will come with digital India and development of domestic solar energy market where Silver will be used.
Silver's industrial role is much more than that of gold's and it is for this reason that a shortage of Silver will have higher negative implications than there would be if there was a shortage of Gold. 

HINDUSTAN ZINC’S TRANSITION TO A FULLY UNDER-GROUND MINING COMPANY BY FY 2019

India's only and the world's second largest integrated zinc producing company, Hindustan Zinc, is all set to become a fully underground mining company by year 2019.
Rampura Agucha Mine of Hindustan Zinc, the world's second largest zinc producing mine and responsible for 75% of company's total output, is gradually moving from open-cast to underground mine operations. The company is expected to close the open-cast mining operations by 2019 and would operate only under-ground mine. The 955 meters depth shaft sinking work at Rampura Agucha Mine has already been completed and commissioned.
In the year 2016-17, Rampura Agucha mine produced ore both from open-cast and under-ground 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 4.50 million tonnes by 2019-20. The ore production capacity of Rampura Agucha mine as on 31st March 2017 stands as 6.15 million tonnes.
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 to Hindustan 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.
Hindustan Zinc is on its way towards transition to a fully underground mining company with next generation of technology. This transition will be completed either by the end of current financial year or maximum by early next year. Certainly the production level at open cast mine are much easier when compared to underground mine and initially we are expecting the production levels to be slightly challenging at Rampura Agucha. But since they are ramping up all the other mines, they are well placed to meet the requirements of their smelters and also the production levels. Gradually, the production level at Rampura Agucha under-ground mine will pick-up and will further support the expansion plans.
This transition is part of series of systematic decision and this is the reason they have already speeded up expansion in our other underground mines to ensure that the overall mine production is not impacted.
By 2019-20, Hindustan Zinc will be expanding its all mines to meet the growing demand. Rajpura Dariba mine is being expanded to 1.5 million tonnes from the current capacity of 0.9 million tonnes. The silver rich Sindesar Khurd mine is being expanded from the current capacity of 4 million tonnes to 6 million tonnes. Zawar mines are all set to reach the capacity of 2.5 million tonnes from 1.8 million tonnes in the current financial year and subsequently to 4.5 million tonnes in next 3 years. 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.
The shaft sinking work has been completed at Sindesar Khurd mine which has reached the depth of 1050 meters and a new mill of 1.5 mtpa capacity has already been commissioned last year to support the enhanced ore production at Sindesar Khurd mine. The Company is also setting up Fumer Plant to further improve recovery of metals from the slag.
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 17.50 mtpa in the next three years, i.e. by FY 2020.
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 and within three years the company is expected to expand the capacity of metal production to 1.2 million tonne an eventually to 1.5 million tonnes in the next 5 years.
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 will also drive zinc consumption in India.
Agriculture is another area where zinc can improve the yield of crops since a large agriculture land in India is suffering from zinc deficiency which is not only impacting the mineral value in crops but also affected the overall production.
Hindustan Zinc is counted amongst the top 50 companies in all sectors in India. The company has high quality of grades of ore but also keeps tight control on the costs, best in class technology and substantial cash accruals to meet expansion plans.

FORBES MAGAZINE - BENEATH THE SURFACE

4th August, 2017 I By Varsha Meghani
Hindustan Zinc - India's Super 50 Companies 2017 by Forbes India.

What makes it Super
  • Access to high quality grades of ore lends it a ‘natural’ advantage
  • Tight control on costs helps it retain it healthy margins
  • Quick adoption of the best-in-class technologies
  • The integrated nature of their operations adds to their cost advantage.

A 100-tonne truck emerges from pitch darkness and rumbles past us. Outfitted with helmets, rubber boots and fluorescent overalls, we’re seated in an SUV, waiting to plunge into the same abyss. Around us hills dot the dry landscape.

We’re at the mouth off the Sindesar Khurd, an underground zinc-lead mine operated by Hindustan Zinc in Dariba on the outskirts of Udaipur in Rajasthan. About an hour ago, a blasting had been carried out in the 500-metre deep mine. The truck that crossed us had scooped up the broken rock and was on its way to a nearby mill where the zinc-lead ore would be separated from the waste.

This extraction of zinc and lead - and silver as a by-product–is a thriving business; one that has catapulted Hindustan Zinc from deep losses, when it was a government run–entity, to huge profits after Anil Agarwal’s Vedanta Ltd (formerly Sesa Sterlite) bought its first tranche of the company’s shares in 2002. Last fiscal, the company – 29.5 percent of it is still owned by the government–reported earnings before interest, tax, depreciation and amortisation (Ebitda) of Rs. 9,734 crore on revenues of Rs. 18,642 crore. Meanwhile, cash reserves stood at Rs. 16,065 crore. This, despite declaring an interim and special dividend totalling Rs. 27,157 crore–the highest ever paid by an Indian company in a single financial year claims the company, which trades at Rs. 274 on both the BSE and the NSE (as of July 14). “When our balance sheet became very fat, we decided to share the money with the government, our shareholders and us”, jokes Sunil Duggal, CEO, Hindustan Zinc.

Despite the huge outflow, the company’s expansion plans remain undented. With a current output of 1 million metric tonnes per annum (MMTPA) of refined metal, Hindustan Zinc is the second largest Zinc producer in the world – after Anglo-Swiss mining giant Glencore – and seems well on its way to achieving a targeted output of 1.2 MMTPA by FY2019. It is among the world’s least expensive zinc producers, and also Vedanta’s most profitable unit. In India, it enjoys a near-monopoly (the only other Zinc producer, Binani Zinc, produces 0.03 MMTPA), meeting 80 percent of the domestic demand for the metal that is largely used as a coating to protect steel from rusting. Clearly, Duggal, 55, has much to smile to about.

Our SUV makes its way into the mine. Floodlights blinking, we drive through the mine passages, first 300 metres underground and then 200 metres further. The air becomes heavy and the darkness is interrupted by light bulbs hanging from the rock ceiling at intervals of a few metres. Jumbos–large vehicles that blast through the ore body–navigate the rocky terrain, making way for our car.

Huge mineral wealth is buried deep within those rocks. In fact, some of the richest ore bodies are found in the five zinc–lead mines owned by Hindustan zinc spread across Rajasthan. At Sindesar Khurd, the ore grade–the concentration of mineral within an ore–is 6 percent. While at Rampura Agucha–the company’s flagship mine, and also the world’s largest zinc-producing mine – the ore grade is even higher: “The open cast pit mine at Rampura Agucha has a grade quality of 13 percent, while the underground mine has a grade of 14.1 percent. Globally the average is about 3 percent”, says Ashutosh Somani, metals and mining analyst, institutional equities research, JM Financial.

This natural bounty has ensured that Hindustan Zinc maintains its advantage on the cost of production of zinc. At around $800 per tonne, the company’s cost of production is around 30 percent lower than that of its global peers, says Andrew Thomas, principal analyst, zinc markets, at Wood Mackenzie, an Edinburgh-headquartered research consultancy.

Remarkably, Hindustan Zinc has been able to maintain this cost over the years; around 15 years ago, at the time Vedanta stepped in, the cost was the same. What was different, however, was the price of zinc on the London Metal Exchange (LME). Back then it hovered around $800 to $850 per tonne, says Duggal, which meant that the company was largely loss making. So much so that in 2002 when Vedanta bid for a controlling stake in Hindustan Zinc, it encountered little competition; it bought a 26 percent stake from the government for Rs. 445 crore, while another 20 percent was acquired from the public. (In 2003, Vedanta acquired an additional 18.9 percent stake from the government for Rs. 324 crore, taking its total ownership in Hindustan Zinc to 64.9 per cent.)

Around the mid–2000s a China driven commodities boom began, with the prices of oil to iron ore and zinc shooting up. Hindustan Zinc’s profit followed suit; in fact its margins only became fatter as its cost of production remained steady.

Today, zinc prices move between $2500 to $2700 per tonne on the LME. “We never look at commodity cycles when looking at production,” says Duggal, pointing out that even at about $1400 per tonne – the lowest zinc prices have sunk to over the last five to six years–Hindustan Zinc still pocketed a good margin, given its $800 per tonne cost of production. Even at the height of the global financial meltdown in 2009, when zinc prices plummeted to around $1100 per tonne and prompted producers worldwide to shut mines or halt production, Hindustan Zinc made money. “So that [global zinc prices] is not a topic for me. The only topic is first to control costs and second to increase volumes”, adds Duggal.

Apart from the low cost of labour in India, Hindustan Zinc’s access to abundant, and high grade, ore is just one of the factors that enables it to maintain its low cost of production. After all, these resources were available to it even when it was an unprofitable, state–run company.

In fact, at the time of Vedanta take over in 2002, Hindustan Zinc produced only 0.2 MMTPA of refined metal. “Globally, we were nowhere,” says Naveen Singhal, president and director, projects, at Hindustan Zinc. “But our chairman’s [Anil Agarwal], vision was to make the company a global first or second.”

Upping production was key to that vision. And so from 2003 to 2005, Hindustan Zinc undertook what Singhal describes as “Phase 1 of the expansion journey, targeting 0.5 MMTPA of ramped up capacity. The challenge however, was to keep capex costs low so as to make the project financially viable, given the low zinc prices at that time, says Singhal. Also, project delays had to be avoided so as not to get caught in a spiral of interest payments. “We engaged the best of contractors with the right technology and right infrastructure practices so that they could do our project right”, he says.

In addition to mine expansion, zinc and lead smelters, and the company’s first thermal capacity power plant were built. “Our smelters are power intensive. If we didn’t have a power plant, firstly our costs would be higher and secondly getting reliable power would be an issue. Without reliable power, we can lose millions of dollars in a day”, says Singhal. This integrated project was completed in record time and at a cost 40 percent lower than the global benchmark, because of the right technology partners, as well as the low cost of labour that India enjoys, he adds.

By the time the project ended, metal prices started soaring and Hindustan Zinc began raking in the profits. Hungry for more, it eyed large volumes, targeting 0.8 MMTPA of capacity expansion by 2008 as part of Phase 2. This time too, the company ramped up not just its mines, but also the capacity of its smelters and power plants. “Each time we spent money, we spent it in all three areas”, says Singhal. The fact that Hindustan Zinc’s mines and smelters and power plants are located close to each other reduces transportation costs, while the power plants meet 94 percent of company’s energy needs, says Somani. “The integrated nature of their operations adds to their cost advantage,” he says.

Currently, Hindustan Zinc produces 0.9 MMTPA of metal and is on track to meet its next target of 1.2 MMTPA by FY 2019. As part of this phase, in 2012, it found that the open pit production at Rampura Agucha, responsible for 70 to 85 percent of the total output was tapering. Exploration studies revealed that a kilometre beneath the earth’s surface the reserves were still rich. Swiftly, the management implemented a transition from open cast mining to underground mining. Here too, investments in world–class technology, including the building of 1 km–long shafts at Rampura Agucha and Sindesar Khurd mines, are underway to increase efficiencies. Digital technologies, such as wifi infrastructure within their mines, are also being built to connect their operations and resources in real time. “It is the next generation of underground mining,” says Duggal.

The challenge, however, will be to compensate for declining output from open cast mining, while still meeting the 1.2 MMTPA target. This is important for retaining volume and, therefore, cost advantage. At present, the company produces 0.4 MMTPA of metal from underground mining operations. “We are not going from 0.9 to 1.2 MMTPA, but from 0.4 to 1.2 MMTPA. It is a three-fold expansion,” says Singhal, adding that over the last 10 to 12 years the company has spent more than $3 billion on expansion work.

As we drive through the mine passages, making our way back to the top, the air becomes lighter. Metres away from the mouth of the mine sunlight floods into the SUV. The full extent of the riches that lie beneath the surface become astonishingly clear.