The year 2016-17 has been record breaking in many ways for your Company. Despite acyclical weaker first half the Company delivered highest ever production of ore minedmetal & silver EBITDA and net income. With a relentless discipline on efficiency andproductivity across all our operations the strong earnings buoyed by strong metal pricesenabled us to create shareholder value and declare record dividends.
We achieved all time high mined metal and silver production while successfully limitingour operating costs in a high commodity price scenario through significant efficiencyimprovements. Our cost optimisation initiatives across the board helped us protect cashflows and maintained our position in the first quartile of the cost curves which has beenour strength over the years. We are taking further steps in the coming years leveragingthe adoption of new technologies and encouraging a culture of innovation among our people.
We are proud to be associated with the Government's 'Make in India' program. India is acountry blessed with natural resources that are waiting to be discovered. I believe thatthe natural resource sector can be catapulted to become the largest contributor to thecountry's GDP with the right policies and focus. To reduce the shortage of skills in hardrock underground mining in the country Hindustan Zinc has established a mining academy inpartnership with National Skill Development Corporation of India. I am proud to share thatwe are the only Company in the country with three mines recognised with Five Star ratingsby Indian Bureau of Mines Government of India for their efforts and initiatives taken forimplementation of the Sustainable Development Framework and for exemplary compliance &best practices. Inclusive of dividend FY 2016-17 recorded our highest ever payout of `17760 Crore to the government treasury our small contribution in nation building.
During the year we spent ` 49.4 Crore in our CSR programs across our businesslocations partnering with almost 25 NGOs local governments hospitals and academicinstitutions on socio-economic development projects that touch the lives of around fivelakh people. In addition we donated ` 50 Crore to a group CSR foundation for constructionof 'Nandghars' an initiative to create better education facilities and infrastructure foryoung children in their formative years.
The health and safety of our employees continues to be at the top of our agenda we haveimproved our safety culture and reduced LTIFR substantially in the last few years.However despite our best efforts to achieve a zero-harm culture we had an incident of arare crane collapse resulting in four fatalities of employees of our contractor at aproject site during the year. Our teams are working towards ushering in global bestpractices as safety culture of our contractors as well to ensure a safe workingenvironment.
Reducing carbon footprint and utilizing water judiciously is the biggest challenge ofour generation. Our dedication to environmental sustainability continues to drive ourbehaviour in our operations. This year we installed 16 MW solar plant on our wastelandsat Debari and Dariba utilizing Nature's sunshine to energise our operations; this is inaddition to over 300 MW of existing renewable power. CII-Indian Green Building Council(IGBC) awarded Platinum rating to our Corporate Office at Udaipur the first such buildingin Rajasthan and among only fourteen in the country setting a benchmark through policy ofreduce recycle reuse and reclaim. Dariba power plant is the first and only runningpower plant in Rajasthan to run completely on sewage treated water eliminating freshwater usage. Our aim is to utilize resources provided by Mother Earth in best possiblemanner to meet growing demands from the same reserves. This year we commenced constructionof 'zinc fumer' project for our Chanderiya Hydrometallurgical Smelter to improve therecoveries of major & minor metals and to reduce hazardous waste generation and therecurring land required for their long term storage.
When the mining expansion projects were announced in early 2013 share of mined metalfrom underground mines was 15% which increased to 52% in FY 2017 and is expected to reach80% in FY 2018 before becoming 100% in FY 2019. The five year CAGR of 39 percent in ourunderground mined metal production while maintaining a stable dollar COP (excludingroyalty) is a testimony to the Company's smooth transition from open cast mining tounderground mining. The mining projects should complete in FY 2020 when the full capacityof 1.2 million MT of mined metal is expected to be in place. Both the Rampura Agucha andSindesar Khurd shafts are on track for completion in FY 2019.
The record performance of the Company supported by strong zinc prices has helpedHindustan Zinc generate unparalled value for its stakeholders during the year as itreturned ` 27157 Crore (including dividend distribution tax) to shareholders in the 12months ending March 31 2017 which is a record in Indian corporate history. Even as wecontinue to navigate our journey of 1.2 million MT of mined metal we are evaluating thenext phase of our capacity expansion.
|Agnivesh Agarwal |