Hindustan Zinc, owned by Vedanta, has paused its demerger plans and is focusing on consolidating operations in India. The company is discussing a $1–1.1 billion (₹8,500 crore) phase-I growth capex, with Board approval expected within a month.
Combined with similar investments in future, Hindustan Zinc aims to double its production to nearly 2 million tonnes (mt) in the coming years, CEO Arun Misra, told businessline.
According to Misra, the capex is expected to be funded “preferably” through a mix of debt and equity. The company generated free cash flows to the tune of $1.1 billion for FY25, with current debt cost being “less than 8 per cent”.
For FY25, the company had a net debt position of ₹1,200 crore. Net debt was brought down from ₹5,700 crore level, as on September 30, 2024.
Mined metal production for FY25 was around 1.1 mt. Revenues stood at ₹34,083 crore, up 18 per cent y-o-y, while EBITDA stood at ₹17,465 crore, up 28 per cent y-o-y. EBITDA margin at 51 per cent reported a 400 basis points improvement. Profit after tax increased by over 33 per cent, to ₹10,353 crore.
“The growth capex to double production is under discussion and nearly $1 billion investment is under consideration. There will be phase-wise increase in capacities across mines and we are working on it. In the next one month or so we will go for Board approvals,” Misra said.
Capex guidance for FY26 is around $225-255 million (₹2,000 – ₹2,300 crore) – primarily for debottlenecking, equipment replacement at mines and so on. Board approved growth capex would be separately considered.
Expansion plans
The company has already charted out output expansion plans across two of its eight mines – Rampur Agucha and Sindeswar Kurd – while work is on across 6 more (Rajpura Dariba, Zawar, Kayad, and others). Consultants or mine development operators have been appointed for the same.
“A few loose ends have to be tied up and after that we go to the Board,” the company’s top brass had said during an investor call.
Asked about demerger plans, including acquisition of mines overseas, Misra said, “The plans were made keeping in mind the situation then.” However, with parent Vedanta looking to scale up operations at the recently re-instated Zambian copper mines and its own group demerger plans being put in motion, “Hindustan Zinc opted for a change in strategy”.
The company would look to consolidate presence in India, at present, including foraying into critical minerals and ramping up precious metal production (silver).
Critical minerals
As part of this India-centric strategy, Hindustan Zinc recently secured leases for a tungsten block (critical mineral) in Andhra Pradesh and a gold mining block in Rajasthan. “It will take two to three years for mining to start across these new blocks. We are currently completing the documentation processes, after which exploratory activities will begin,” Misra said.
“Over the next few years, we move from just a base metal miner to precious and other critical mineral production,” Misra added.
Published on April 25, 2025
