Hindustan Zinc Ltd.'s chief executive officer, Arun Misra, increasing the use of locally supplied coal, utilising digital projects for operational savings, and increasing volume will be the major enablers in lowering the production cost of zinc. Misra, "We have been using domestic coal from India as an offset against expensive imported coal." "Even though we were built to consume 30% of domestic coal, we were only getting 4-5% at first. Since it began to rise, it has increased by 17–20% yearly.
The other enablers will be modifying contracts in a way that will lower mining rates and the use of digital projects that can provide real-time data to regulate consumption and improve operations.
Additionally, the larger volume we anticipate for the following year will help us redistribute the fixed expenditures, lowering total costs, he added. According to projections made by the nation's largest zinc producer, the cost of producing zinc will drop from $1,257 per tonne in 2022–2023 to $1,125–1,175 per tonne in the current fiscal year. In addition, it is predicted that production of mined metal will increase this year from 1.06 million tonnes to 1.07–1.10 million tonnes.
The lowest quarterly cost of production in FY23, its zinc production cost in January-March was $1,214 per tonne, a 6% decrease from the prior quarter. According to Misra, zinc demand in India will increase by 4-5% this year, with prices hovering around $2,800-$3,000 per tonne. "This is primarily due to some uncertainty regarding China's recovery process and overall there is a slowdown or inflation-related economic headwind in the US," the economist said. He estimated that the global demand of zinc may increase by 2.5 to 3.0%, and that as a result, "the prices will also continue to fluctuate in that zone only."
Given the strong demand, the company which is also the fifth-largest silver producer in the world and the biggest in India sees prices rising from current levels. Hindustan Zinc's combined profit in FY23 reached an all-time high of Rs 10,511 crore, while sales also reached a record high of Rs 24,180 crore thanks to record mined metal production of more than a million tonnes.
