Our fully integrated zinc business is owned and operated by HZL, India’s leading zinc producer with a 79.7% market share by volume of the Indian zinc market in fiscal 2008, according to the Indian Lead Zinc Development Association. HZL was the world’s fifth largest zinc mining company in 2007 based on mine production and is also one of the top ten lead mining companies by production volume worldwide, according to Brook Hunt. Sterlite owns 64.9% of the share capital of HZL.
HZL’s operations include three lead-zinc mines, three hydrometallurgical zinc smelters, one lead smelter and one lead-zinc smelter in Northwest India and one hydrometallurgical zinc smelter in Southeast India. HZL’s zinc production increased from 284,000 tonnes in fiscal 2006 to 578,000 tonnes in fiscal 2010, representing a CAGR of 19.4%. The production increases, together with higher zinc market prices, drove revenue of our zinc business from $875.5 million in fiscal 2006 to $1,651.7 million in fiscal 2010, representing a CAGR of 17.2%.
HZL achieved the 1 mtpa zinc lead capacity through recent commissioning of the 210,000 tonnes zinc smelter in Rajpura Dariba. The 100,000 tonnes lead smelter and the associated 160 MW capitve power plant is progressing well and on schedule for completion by Q2FY2011.
HZL expects to increase its silver production from the current levels of approximately 100-120 tonnes per year to a level of approximately 500 tonnes per year in the form of silver and silver bearing residue. A large part of this increase would be from the Sindesar Khurd mine where silver occurrences are approximately at levels of 200 ppm and from the use of appropriate technology in the new smelters.
The ongoing explorationn activities at HZL has yielded significant success with an increase of 33.7 mt gross reserves and resources, prior to depletion of 7.1 mtpa in FY2010. Total Reserves and Resources as at 31 March 2010 stand at 298.6 mt containing 34.1 mt of zinc lead metal and 832.7 moz of silver.