Arun Misra, CEO of Hindustan Zinc and Executive Director of Vedanta, in a recent interview with Livemint, shed light on the company’s strategic decisions and future prospects. Hindustan Zinc, known for its prowess in the metal mining sector, has been successful in achieving a fourth consecutive quarter of cost reduction in its Q3 results for 2024, with Misra providing insights into the underlying factors.
Key to these cost reductions have been a combination of lower import coal prices, strategic investments in power plant upgrades, and an increase in ore grade. Misra emphasized Hindustan Zinc’s flexibility in using different coal sources and highlighted the improvement in ore grade from 7% to 7.4% over the past year.
In response to global market dynamics, Hindustan Zinc is not actively seeking auctions but is open to bidding for critical minerals blocks that align with its business growth strategy. This approach is indicative of the company’s readiness to participate in nickel or lithium auctions, should the opportunity arise.
Misra pointed out the increasing demand for silver, particularly from the younger generation who view it as a more affordable alternative to gold. The company’s focus on silver aligns with its growing industrial applications, including in electronics and solar panels, in addition to its traditional role in the jewelry and pharmaceutical industries.
The company is undergoing strategic restructuring, as decided by its Board of Directors, to create separate legal entities for its zinc and lead, silver, and recycling business verticals. This restructuring aims to attract a broader range of investors and unlock potential value in each segment.
Hindustan Zinc’s resilience in the face of fluctuating zinc prices is noteworthy. The company, operating in the lowest cost decile, remains confident in its ability to navigate market volatility. It is also optimistic about the long-term zinc price forecast, setting a base case at around $2,800 per ton, based on London Metal Exchange projections.
As for expansion plans, Hindustan Zinc aims to increase its capacity to 1.5 MTPA, with incremental ramp-ups planned for its key mining operations. For the Rampura Agucha Mine, the world’s largest underground zinc mining operation, the company is exploring an alternative access to the portal. At the Sindesar Khurd Mine, known for its high-grade silver, a vertical conveyor system is set to be commissioned.
Regarding the impact of the Red Sea attacks, Hindustan Zinc expects minimal disruption to its exports due to diversified routes and limited reliance on Red Sea passages. Although some fluctuations are anticipated for customers in Saudi Arabia, the company is well-positioned to navigate these challenges. 
