September 08, 2008

HZL clarifies on press release on expansion plans

With reference to the earlier announcement dated April 24th 2008 regarding press release titled 'Hindustan Zinc to become world's largest integrated zinc lead producer', Hindustan Zinc Limited has now informed BSE that in the said press release, in para one the figures of 210,000kt and 100,000kt be read as 210,000 tonnes and 100,000 tonnes.

In this regard the revised press release is as follows

Hindustan Zinc Limited has announced expansion projects that will take its total integrated zinc lead capacity to 1,065,000 tonnes per annum with fully integrated mining and captive power generation capacities, thereby making HZL the world’s largest integrated zinc lead producer by 2010. HZL will continue to maintain its superior cost leadership position among the zinc producers in the world. Two brown field smelter projects, which will increase the production capacities of zinc and lead by 210,000 tonnes and 100,000 tonnes respectively, will be undertaken at Rajpura Dariba in Rajasthan.

HZL expects to increase its silver production from the current levels of approximately 100 tonnes to 200 tonnes per year to a level of approximately 500 tonnes per year in the form of silver and silver hearing residue. A large part of this increase would be front 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 expansion is supported by HZL's strong reserves and resources of 232.3 million tonnes containing 27.5 million twines of Zinc-lead metal at March 31, 2008. The reserves and resources position have been earlier independently reviewed and certified as per the JORC standard.

To support the increased smelting capacities, HZL will expand its ore production capacity at the Rampura Agucha mine from 5 million tonnes per annum to 6 million tonnes per annum. Further, ore production at the Sindesar Khurd mine, the new star in HZL's mining portfolio, will be increased from 0.3 million tonnes per annum to 1.5 million tonnes per annum. HZL will also start mining activity at the Kayar mine which will have a production capacity of 0.3 million tonnes per annum.

In line with the group's philosophy of being a fully self reliant producer of power, a captive thermal power plant with a capacity of 160 MW will also be set up at Rajpura Dariba.

The zinc and lead smelters as well as the 160MW captive power plant and the Rampura Agucha mine expansion will be complete by mid-2010. The expansions at the Sindesar Khurd and Kayar mines will be completed in phases by early 2012.

The total investment in these projects is estimated at INR 3,600 crore. This investment includes the cost of the smelters, captive power facilities, mine development and shaft sinking and other infrastructure. The expansion will utilize the same technology and project management skills that successfully delivered the Chanderiya II expansion project ahead of schedule.