KOLKATA (miningweekly.com) – India’s largest zinc miner, Hindustan Zinc Limited (HZL), part of Vedanta Group, has lined up an estimated $2-billion for capital investments over the next five years to ramp up metal production to 1.5-million tons a year, up from 800 000 t/y currently.

“We have already started working on increasing zinc production to 1.3-million tons a year and it will take two to three years to reach this level. Thereafter, we will aim for production of 1.5-million tons a year, which would take another two years,” HZL CEO Sunil Duggal said in a statement.

The entire investment would be funded through internal accruals.

HZL is also looking at diversifying its mining activities and entering iron-ore, copper and gold production. The company has 26 mining licences across the country and although most are for zinc reserves, it has iron-ore, copper and gold licences in Karnataka and Maharashtra. However, HZL would need policy and administrative support from governments to execute these mining licences and expand the company’s metal mining businesses.

Last year, the Indian government decided to put on the backburner a plan to make it mandatory for automobile manufacturers to use 70% zinc-galvanized steel in vehicle bodies and parts. Automobile manufacturers claimed that the plan would drastically change the industry’s cost structure.

After detailed perusal of the proposal, the government felt that it would be counterproductive if such a policy was made mandatory, risking the fall-out of a sharp surge in demand of domestic galvanized steel and thereby forcing automobile manufacturers to increase import shipments for such grades of steel, the official said.

Earlier in the year, the Ministry of Highways and Surface Transport suggested making it mandatory for automobile manufacturers to increase the usage of galvanized steel to 70% of all automobile bodies and parts, from 30%, to prevent losses owing to corrosion in line with global practice.

However, even without the possible demand driver for zinc from automobile manufacturing in the immediate future, Duggal forecast that Indian domestic demand for the metal was growing at 4% to 5% a year, beating global growth of 2% to 3% a year.

But with growth in infrastructure projects in the country and government’s directive to promote greater use of anti-corrosive steel in coastal regions, HZL expected domestic demand for zinc to rise by about 8% to 10% a year, and, hence, the company would continue to push for higher zinc production domestically.