HINDZINC - Hindustan Zinc Ltd. Share Price

Question 1: Are we running the plant on lead mode or zinc-lead mode given pricing economics favor lead mode?

I clarifed that we are currently operating in zinc-lead mode. We are adjusting our strategy to maximize silver production by utilizing concentrates from the SK Mine, which is rich in silver. Given the silver grade from the mine is around 90 ppm, a lead-only approach wouldn't yield enough benefits. Hence, running on a zinc-lead mode optimizes our silver output under present conditions.

Question 2: Based on our 680 tons of guidance for silver, how are we expecting to achieve this in the second half? Can we see 800 tons in FY '27?

We redirected resources to SK Mine and incentivized our contractors to prioritize high-silver stopes. This strategy aims to boost H2 production to meet our guidance confidently. As for 800 tons in FY '27, we believe this is achievable. Stability from the fumer and acid leaching, coupled with the new 250 KTPA plant, should support increased output.

Question 3: Can you elaborate on the capital expenditure projections for FY '27 and FY '28?

The 250 KTPA smelter and tailings project combined will total about INR 12,000 crores and INR 3,800 crores, respectively. Expect around 20% of this capex in FY '26, with 50% in FY '27 and the remainder in FY '28. This structure helps manage cash flow and resource allocation during project execution.

Question 4: For FY '26, what will be the total capex including maintenance?

For FY '26, we estimate growth capex between USD 350 million and USD 400 million, while maintenance capex will be around USD 400 million. Together, this gives us a comprehensive view of our capital investments for this year.

Question 5: What refined metal output do we expect from the tailings project?

The 10 million tons tailings project is expected to produce around 100 KTPA of zinc. There might also be a small fraction of lead and approximately 25 tons of silver in the concentrate as part of this initiative.

Question 6: How much was the average mining rate for this quarter?

The average mining rate for this quarter was 7.4%. While we aimed for around 7%, the achieved rate reflects a slight improvement from 7.3% in the same period last year, showcasing our operational efficiency.

Question 7: What proportion of renewable energy was utilized this quarter and the expected proportion at FY '26's end?

In this quarter, renewable energy constituted 19% of our energy mix. We are targeting an increase to around 25% by the end of FY '26, which will further help in managing our cost of production.

Question 8: What is our current hedging position for zinc and silver?

We currently have zinc hedged at 87 KT at an average price of $2,872 per ton and silver hedged at 131 tons at $37 per troy ounce. Our strategy remains flexible, allowing for adjustments as market prices fluctuate, ensuring a balanced margin.

Question 9: Can you share the outlook for refined metal production in FY '27 and FY '28?

At this moment, we cannot provide specific guidance for FY '27 and FY '28. However, with improved operations from the newly commissioned roaster and ongoing expansions, we are targeting increased production above 1.1 million tons for FY '27.

Question 10: What is the expected increase in refined metal capacity from the debottlenecking process?

The debottlenecking process is projected to increase our refined metal capacity by about 25,000 tons annually, focused primarily on zinc production. This enhancement will help optimize our output and better meet market demands.