After the commissioning of the new mills, the ore treatment capacity will increase to 17.5 MT from the current 14.5 MT per annum.
"Setting up of new mills is part of our plan to match growing demand of zinc in India. With over 3 MT of additional treatment of ore, we would be able to increase the substantial volume of metal.
"We are on our course to produce 1.2 MT of metal and moving steadily to produce 1.5 MT. We are investing close to Rs 6 billion to set up these two new mills," Hindustan Zinc CEO Sunil Duggal told PTI.
Moving towards a fully under-ground mining company by FY2019, the company aims to take its zinc production to 1.5 MT in the next five years.
"Both the new mills are expected to be commissioned by Q3 of FY2019," Duggal said.
He said the first mill of 1.5 MT is being commissioned at Zawar mines, about 45 km away from Udaipur. Zawars current ore treatment capacity is 2.5 MT, and post setting up of new mill of 1.5 MT, the ore treatment capacities would increase to 4 MT.
Zawar has four mines with combined ore production capacity of 4 MT which is being expanded to 8 MT in the next five years through mechanisation and switching over to trackless mining.
Duggal said the second mill of 1.5 MT is being commissioned at Sindesar Khurd mine in Rajsamand district in Rajasthan. Sindesar Khurd mines current ore treatment capacity is 4.5 MT which would increase to 6 MT after commissioning of the mill.
Sindesar Khurd mine is known for its silver production.
Duggal said Hindustan Zinc is transitioning to become a fully under-ground mining company by FY 2019.
The company is also setting up fumer plant to further improve recovery of metals from the slag to boost its metal production, particularly lead-silver with an investment of Rs 5.7 billion.
"Our fumer plant is also on track for commissioning soon. This will give us the technology to extract lead and silver from waste, Duggal said.
The company has plans to put-up three fumer plants overall at its locations in Rajasthan.
He said since disinvestment in 2002, Hindustan Zinc has invested over $3 billion in expansion programmes to reach the metal production capacity of 1 million tonne.
Analysts have projected the global zinc market to grow at a CAGR of 3.96 per cent during 2017-2021.