India's only and the world's second largest integrated zinc producing company, Hindustan Zinc, is all set to become a fully underground mining company by year 2019.Rampura Agucha Mine of Hindustan Zinc, the world's second largest zinc producing mine and responsible for 75% of company's total output, is gradually moving from open-cast to underground mine operations. The company is expected to close the open-cast mining operations by 2019 and would operate only under-ground mine. The 955 meters depth shaft sinking work at Rampura Agucha Mine has already been completed and commissioned.
In the year 2016-17, Rampura Agucha mine produced ore both from open-cast and under-ground mine. The contribution of open-cast was 3.3 million tonnes and under-ground as 1.4 million tonnes. Rampura Agucha mine ore production capacity is expected to reach about 4.50 million tonnes by 2019-20. The ore production capacity of Rampura Agucha mine as on 31st March 2017 stands as 6.15 million tonnes.
According to the metals and mining analyst, the grade at Rampura Agucha open cast mine is 13 percent and the under-ground mine would be also similar. Globally the average grade varies between 3-6 percent and that gives a huge advantage to Hindustan Zinc in global market. Even the cost of production of Hindustan Zinc, which is about $ 800 per tonne, is 30 percent lower than that of the global peers.
Hindustan Zinc is on its way towards transition to a fully underground mining company with next generation of technology. This transition will be completed either by the end of current financial year or maximum by early next year. Certainly the production level at open cast mine are much easier when compared to underground mine and initially we are expecting the production levels to be slightly challenging at Rampura Agucha. But since they are ramping up all the other mines, they are well placed to meet the requirements of their smelters and also the production levels. Gradually, the production level at Rampura Agucha under-ground mine will pick-up and will further support the expansion plans.
This transition is part of series of systematic decision and this is the reason they have already speeded up expansion in our other underground mines to ensure that the overall mine production is not impacted.
By 2019-20, Hindustan Zinc will be expanding its all mines to meet the growing demand. Rajpura Dariba mine is being expanded to 1.5 million tonnes from the current capacity of 0.9 million tonnes. The silver rich Sindesar Khurd mine is being expanded from the current capacity of 4 million tonnes to 6 million tonnes. Zawar mines are all set to reach the capacity of 2.5 million tonnes from 1.8 million tonnes in the current financial year and subsequently to 4.5 million tonnes in next 3 years. The company's Kayad mine in Ajmer has ore production capacity of 1 million tonnes and efforts are being made to expand this mine as well.
The shaft sinking work has been completed at Sindesar Khurd mine which has reached the depth of 1050 meters and a new mill of 1.5 mtpa capacity has already been commissioned last year to support the enhanced ore production at Sindesar Khurd mine. The Company is also setting up Fumer Plant to further improve recovery of metals from the slag.
Though ore production capacity of all the mines put together is 12.20 mtpa, the actual ore production in the year 2016-17 was 11.87 million tonnes. The company is aiming to expand the mine production levels to 13.10 mtpa in the current financial year and reaching to 17.50 mtpa in the next three years, i.e. by FY 2020.
Since disinvested in 2002, Hindustan Zinc has invested over USD 3 Billion towards its 4 phases of expansion programs to reach to metal production capacity of 1 million tonne and within three years the company is expected to expand the capacity of metal production to 1.2 million tonne an eventually to 1.5 million tonnes in the next 5 years.
The global zinc market is expected to grow at a CAGR of 3.96% during the period 2017-2021. The zinc consumption in India is too increasing every year and eventually the issue of corrosion in the new sectors like automobiles, railways, use of galvanised re-bars in coastal structures, electricity distribution network will also drive zinc consumption in India.
Agriculture is another area where zinc can improve the yield of crops since a large agriculture land in India is suffering from zinc deficiency which is not only impacting the mineral value in crops but also affected the overall production.
Hindustan Zinc is counted amongst the top 50 companies in all sectors in India. The company has high quality of grades of ore but also keeps tight control on the costs, best in class technology and substantial cash accruals to meet expansion plans.
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