Zinc output rises 17 per cent in May

Demand may revive since infrastructure sector has shown marginal improvement.

Despite uncertainties in the global financial markets that may affect base metal’s consumption locally, the country’s zinc output rose 17 per cent in May on continuous expansion in installed capacity by the largest producer Hindustan Zinc (HZL).

HZL, a Vedanta Group company, recorded a 15 per cent increase in output at 46,801 tonnes in May 2009 as compared to 40,698 tonnes in the corresponding period last year. Binani Zinc (BZL), the country’s second largest producer, witnessed a staggering 52.56 per cent rise in monthly output to 3672 tonnes from 2407 tonnes in the month under consideration.

However, total zinc output in the first two months of the current fiscal increased 16.51 per cent at 100,661 tonnes as compared to 86,395 tonnes in the corresponding period of the last year, according to sources in the Ministry of Mines.

HZL reported total output at 93,587 tonnes during the first two months period, a rise of 14 per cent from 82,316 tonnes in the same period last year. Similarly, Binani Zinc, the second largest producer, produced 7074 tonnes, a rise of staggering 73.42 per cent from the level of 4079 tonnes in the first two months period of the financial year 2008-09.

“Cost reduction and growth in volumes have been key success factors for Hindustan Zinc. We have been constantly focusing on our recoveries, through-put, power rating and productivity at each of the unit, without compromising on quality,” Akhilesh Joshi, Chief Operating Officer, HZL

Meanwhile, stepping towards being the world’s largest integrated lead and zinc producer with capacity to produce more than one million tonne of metal, HZL achieved total installed capacity at 669,000 tonnes of zinc and 85,000 tonnes of lead in the last financial year from their respective levels at 581,000 tonnes and 85,000 tonnes in the previous year respectively.

BZL continues with an installed capacity of 38,000 tonnes and exploring potential of further mining leases in Rajasthan.

HZL is currently undergoing its third phase of expansion plan at an expenditure of Rs 3,600 crore which is likely to attain the company as the world’s largest integrated producer of lead and zinc by mid 2010. In this phase of expansion, the company is setting up 210,000 tonnes of zinc smelter and 100,000 tonnes of lead smelter in addition to 160 MW of thermal power plant in Udaipur, closed to existing facility.

The expansion will also raise mining capacity of concentrates from 7.1 million tonnes to about 9.90 million tonnes.

Over 60 per cent of zinc produced globally, is consumed in galvanised steel industry of which infrastructure sector is a major user.

Hence, the future of zinc industry depends largely upon the development in infrastructure which is currently passing through recessionary phase.

But, zinc demand would revive since the domestic infrastructure sector has shown a marginal improvement, said an analyst. Hence, the additional output would be consumed easily, he added.