Hindustan Zinc to Invest 83.6 Billion Rupees to Expand Capacityby
Company plans to boost mines, smelter capacities in Rajasthan
Planned investments include a new fertilizer plant in state
Hindustan Zinc Ltd., India’s biggest miner of the metal, plans to spend 83.6 billion rupees ($1.3 billion) in the next three years to ramp up mine and smelter capacities.
The company plans to increase zinc and lead ore mine production in Rajasthan state by 41 percent to 12.8 million metric tons a year and metal output to 1.028 million tons annually from 850,000 tons, the unit of the London-listed Vedanta Resources Plc said in an e-mailed statement on Friday. Hindustan Zinc is also looking to expand all its underground mines, it said.
The investment comes after Vedanta Resources said earlier this week that the company won’t be following Glencore Plc in cutting zinc output after prices slumped this year as it’s “rational” to maintain its low-cost production. Zinc made up 37 percent of Vedanta Resources’ 2014-15 pretax earnings, and it may benefit from the supply cutbacks, according to Bloomberg Intelligence.
Hindustan Zinc’s investments will also include a 500,000 tons-a-year di-ammonium phosphate plant to be set up in Udaipur at an estimated cost of 13.5 billion rupees, Hindustan Zinc said. The new plant would be built in the next three years and generate employment for more than 7,000 people, it said.
Vedanta’s oil unit Cairn India Ltd. has also announced an investment of 125 billion rupees in the next three years in Rajasthan to develop its Mangla-Bhagyam extended oil recovery polymer project, Mangla-Aishwariya in-fills and set up a sulphate removal plant, according to the statement.
Shares of Hindustan Zinc rose 4.8 percent to close at 154.25 rupees in Mumbai on Friday, the highest level since Aug. 7. The advance pared losses to 9.5 percent this year.