Hindustan Zinc commissions Rajasthan unit three months ahead of schedule

April 5, 2010 - PRLog -- Hindustan Zinc (HZL), part of the London-listed Vedanta Resources, has commissioned the 2.10 lakh tonne zinc smelter at its Rajasthan plant three months ahead of schedule. That takes the company's zinc capacity to 8.79 lakh tonne as against 6.69 lakh tonne earlier.

The expansion was originally scheduled to be completed in the middle of 2010. "With the commencement of production, the total zinc and lead metal capacity of the company is now 9.64 lakh tonne per year," the company said in a statement to the stock exchanges.

The company is also increasing its lead production from the current 85000 tonne per year to 1.85 lakh tonne. Once this is complete, HZL will become the world's largest integrated zinc-lead producer, with total production at 1.06 million tonne.

The company, in a note said, "Today HZL's total reserves and resources stand at 232.3 million tonne containing 27.5 million tonne of zinc-lead. The world class Rampura-Agucha mine has also achieved the landmark of crossing 100 million tonnes of reserve and resources with certified reserves and resources of 107.3 million tonne."

Ishpreet Batra, an analyst with Sushil Finance, said HZL's low cost of production will help it even more. "The company's cost of production is as low at $750 per tonne, as against the global average cost of production of $1200 per tonne," he said in a recent report.

"The low cost of production provided a cushion to the margins of the company during the recent economic turmoil. When the realisations had dropped to a low of $1046 per tonne of zinc, 60% of the zinc smelters were incurring losses whereas HZL was having a margin of 28.5%," he added.

HZL has cash reserves of Rs 10,700 crore as on December 31, 2009 and has no debt on its books.

Source: http://www.dnaindia.com/money/report_hindustan-zinc-commi...