Our silver output will double in 5 yrs: Sunil Duggal

Duggal also said that the upside for industrial use of silver is huge

Industrial demand for silver is recovering and India's largest silver producer Hindustan Zinc Ltd (HZL), an Anil Agrawal-controlled Vedanta Group company, is aiming to double its production, HZL Chief Executive Officer Sunil Duggal tells Rajesh Bhayani. Edited excerpts:

Silver imports have fallen sharply. From where is the new demand expected?

Silver growth is only likely to increase in India in the coming years riding on initiatives like Make in India, Digital India and solar energy. India’s industrial consumption of silver is at a mere 16 per cent, against the global usage of 51 per cent. Though we are growing in terms of utilisation of silver in jewellery and silver-ware, the real boost will come from Digital India and the solar industry. Consumption of silver in India is dominated by investments in bars and coins, which is about 37 per cent. Silver jewellery accounts for 30 per cent of the consumption, while 17 per cent is used in silver-ware. As I said, industrial use is far below the global benchmark. That’s why the upside for industrial use of silver is huge.

Which segments of the industry are expected to drive the demand for silver?

Silver is an important raw material for solar panels and other equipment. India currently depends on imported solar panels to drive its ambitious solar programme. China is a big source for solar developers in India. In order to realise the goal of 50 Gw from solar energy, set by the central government, there will be a lot of focus on manufacturing of panels and parts domestically. This will raise the consumption of silver by 2,000 tonnes, while creating ancillary industries and employment opportunities. There is also a good scope for increased usage of silver in overall industrial sector, including chip makers, since India is far behind in comparison to global standards.

How will HZL meet this demand?

Hindustan Zinc has the silver-rich mine Sindesar Khurd. There are other mines which are under expansion. With such mining expansion plans, we are aiming to produce double the quantity, or 1,000 tonnes of silver. In FY17, we plan to produce 500 tonnes of silver. In addition, we have few mining licenses in process and are looking forward to acquisitions as and when we get suitable assets.

By when will the silver production double?

We are aiming to produce 1.2 million tonnes of metals. Initially, silver was being extracted from lead but now it will be extracted from Zinc tailing as well. The overall expansion plan of Rs 8,500 crore is underway already. So, producing 1,000 tonnes of silver will be possible in the next five years. Technological improvements will also help in improving the recovery of silver.


Silver Production: Total Silver (Excluding HSL)

Year	Production quantity (MT)
2011-12	207 MT
2012-13	374 MT
2013-14	350 MT
2014-15	328 MT
2015-16	424 MT

Source: HZL