Vedanta Group firm Hindustan Zinc Ltd (HZL) has begun a detailed exercise for the next phase of expansion and is focussed on creating a long-term sustainable value for stakeholders, according to its annual report. To meet its expansion goal, the company has listed a host of priorities including ramping up underground mines, optimisation of production costs, refocused capital investments, automation and digitalisation.
The company is working relentlessly towards realising its long-term business growth potential and is in advanced stages of implementing brown-field exploration programme across all its mining leases, HZL said in its integrated annual report for FY20.
"Our key strategic priorities for the current year are ramp-up of underground mines towards designed capacity and optimisation of cost of production through efficient ore hauling, higher volume and grades and higher productivity through ongoing efforts in automation and digitalisation," it said.
Among other strategic priorities are refocussed capital investments to enhance profitability and sustainability as well as sustained exploration to add and upgrade resource, the report said.
The company, it said, has commenced an exercise for the next phase of expansion and for this a detailed life-of-mine-planning and feasibility study is currently being done by a renowned global expert.
This new phase will be "technology driven and will ensure that our growth story continues well into the future, creating long-term sustainable value for our stakeholders", it said.
The company said it delivered a healthy performance in a challenging market scenario.
"We progressively ramped up our production during the year (2019-20) and achieved accelerated production rate in the final quarter, before operations were halted in late March 2020 on account of lockdown to combat the spread of COVID-19," it said.
The FY 2019-20 was a muted year for zinc as prices declined in the first half of the year due to global trade tensions, raising concerns around consumption slowdown.
Prices turned around thereafter only to fall back sharply after the outbreak of the novel coronavirus and eventual pandemic that has impacted demand as well as supply globally.
"While the headwinds for zinc consumption may sustain, supply will also witness some curtailment on account of restrictions due to the pandemic," it said.
Also, the current prices will not only make high-cost mines unviable but also lead to interruption in the project pipeline of new supply, the report said.
"Hence, we expect zinc metal supply to match the demand in the near-term and offer support to zinc prices going forward," it said.