Hindustan Zinc's (HZL) proposal to purchase Vedanta's global zinc holdings for about $3 billion. As a result, the business is now trying to purchase zinc mines in South American, South African, or European nations. It is willing to spend between $1.5 billion and $2.5 billion on the ideal purchase.
As of December 2022, HZL's consolidated gross investments, cash, and cash equivalents totaled Rs 16,482 crore. The business had previously stated that the board's plan to acquire Vedanta's global zinc holdings could only be implemented with the support of shareholders at a general meeting. Additionally, it stated that no notice had yet been issued convening a shareholders meeting to discuss the purchase.
The government now owns 29.54% of HZL. The business, which is the largest lead and zinc miner in the nation and the second-largest in the globe, will continue to make an annual investment of $300 million in sustenance capex. "Because there is nothing for sale, it is challenging to obtain zinc mines throughout the world. Although our consultants are looking at numerous houses, we have not yet shortlisted any. Arun Misra, CEO of HZL, said, "We are cash-rich and debt-free, so anything up to $2.5 billion is not a big problem for us. "We produce more zinc than India needs, so the excess must be exported. Exporting requires
expenses like sea freight, port fees, and logistics. In light of this, he continued, "if we have mining and smelting facilities in other places, these can take care of western geographies like the US, Europe, and even the Middle East (West Asia).
HZL produces about 800,000 tonne zinc per annum, while the consumption in India is about 650,000-680,000 tonne per annum. Going forward, the company would continue to spend $300 million a year as sustenance capex, which is mostly for developing underground mines. HZL has completed investing its earlier planned capex for raising annual production capacity to 1.2 million tonne (MT) from the earlier 800,000 tonne.
“Now, we have embarked on some balancing facilities, including for the facility in Debari and for the proposed 500,000 tonne per annum fertiliser manufacturing plant at Chanderiya in Chittorgarh district (both in Rajasthan),” Misra said. The firm is also setting up a zinc alloy plant in Dariba, Rajasthan. This year, HZL expects to cross 1 MT in metals as it aims to reach 1.2 MT in a year and later to 1.35 MT. “So, if the government puts up more zinc mines for auction, as of now there aren’t any, we will participate and if we get some merchant mines, we can expand our capacity to 1.5 MT.”
The company aims to replace its 900 or so diesel-powered mining vehicles with battery-powered ones over the next five years, and is also gradually converting its underground operations to electric vehicles. Throughout the same time span, HZL has set aside nearly $1 billion in investments for EV migration. The company has also signed contracts with Serentica Global for the continuous supply of 450 MW of renewable energy, which is anticipated to begin early in 2019.
He continued, "I believe that by the start of 2024, we will have 100 MW available to us, and our activities will gradually switch from thermal power to renewable electricity. HZL expects the fourth quarter and the upcoming fiscal year to be "good" for a number of reasons, including the opening up of the Chinese economy and the country's use as a market for the export of galvanised steel, the anticipated decline in power prices, an increase in infrastructure spending in India, and an increase in demand from regions like Europe.
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