The Hindu Business Line : Hind Zinc plans to expand lead smelter capacity

HINDUSTAN Zinc Ltd (HZL), a Sterlite group company, plans to expand smelter capacity of refined lead from the present 35,000 tonnes to 85,000 tonnes per annum, at an estimated cost of Rs 95 crore ($21 million).

The enhanced capacity will be ready for commercial production by July 2005.

"Post-expansion, HZL's market share in overall domestic consumption is expected to reach 45 per cent from the current 26 per cent levels," Mr K.K. Kaura, Managing Director of Hindustan Zinc Ltd and also Chief Executive Officer of the Sterlite group, said.

"Domestic demand of lead is 155,000 tonnes whereas the domestic supply is restricted to 55,000 tonnes. Domestic demand is growing at the rate of 6 per cent plus (annually) leading to further widening of deficit," Mr Kaura said.

Of the total domestic consumption, HZL supplies 35,000 tonnes per annum. Nearly 23,000 tonnes is supplied by the secondary market; and the balance through imports, sources said.

The domestic consumption of lead is dominated by battery industries, which accounts for nearly 75 per cent of the total consumption, followed by chemicals and pigments industries at 16 per cent.

Due to the demand-supply gap in the domestic market, there is scope for increasing the lead smelting capacity, he said.

HZL's lead mining capacity is more than the smelting capacity. Expansion will help in having a matching mining and smelting capacity. However, some of the lead concentrate may have to be imported to meet expanded capacity.

This expansion will significantly boost HZL's market share in the domestic lead market. Also, it will improve margins and the entire production will be absorbed in the domestic market leading to better realisations compared to export of lead concentrate. Expansion does not involve very high capital expenditure as it is only smelter expansion and no additional expenditure on mining asset is envisaged, he said.

HZL is an integrated producer of zinc and lead with mines at Rampura Agucha, Rampura Dariba and Zawar in Rajasthan and smelters at Debari (zinc) and Chanderia (zinc and lead) in Rajasthan and Visakhapatnam(zinc) with a total installed capacity of 230,000 tonnes zinc and 35,000 tonnes lead metal per annum.

"We are currently making use of the ISF technology for making bullion lead and the Pyro refining process for refining of lead. The ISF produces nearly 35,000 tonnes of bullion lead every year and the refinery produces approximately 30,000 tonnes of refined lead every year," he said.

The smelting capacity will be expanded by installation of the Ausmelt furnace by 60,000 TPA of bullion lead, which needs to be refined in the refinery.