HZL Presentation June'15 Philip Capital- Final Largest zinc-lead smelter globally: 1 million+ MT of...

June 2015

Corporate PresentationHindustan Zinc

Hindustan Zinc Limited

Hindustan Zinc - A Sustainable Enterprise

2

A Journey towards Excellence - 15 million T Ore Production Capacity; & 1.2 million T MIC production capacity from Underground Mines

1st Rampura Agucha Largest zinc mine globally

2nd Largest zinc-lead miner

globally with: 9 million+ MT of ore production capacity

4th Largest zinc-lead smelter

globally: 1 million+ MT of

production capacity

(Rankings calculated from Wood Mackenzie, March 2015

Long Term Outlook)


Safety & Sustainability

3

Safety

Zero harm to people, host communities and environment

� Safety cultural transformation journey from reactive to interdependent; engagement with “Dupont”

� Integrated safety organisation structure

� Promoting behaviour based safety

� Focus on hazard identification & near misses

Sustainability Initiatives

� Zero water discharge

� Adiabatic cooling towers

� Sewage treatment plant as sustainable water source

� Green energy of 309MW

� Bio-diversity conservation

Safety Pledge during mine safety week

2.292.15

1.95

1.01 0.880.64

FY10 FY11 FY12 FY13 FY14 FY15

LTIFR (per million man-hours worked)

72%


Portfolio of Tier - 1 Assets

4

Zawar Mining Complex

Reserve : 9.6mt Resource : 74.2mtReserve Grade : Zn 3.4%, Pb 1.8%Current Ore Capacity : 1.2 mtpaCPP : 80MW

Wind Power Generation Capacity of 274 MW

Sindesar Khurd Mine

Reserve : 32.2mtResource : 73.9mtReserve Grade : Zn 4.5%, Pb 3.1%Current Ore Capacity : 2.0 mtpa

Rajpura Dariba Mine

Reserve : 9.6mt : Resource : 47.0mtReserve Grade : Zn 6.4%, Pb 1.6%Current Ore Capacity : 0.90 mtpa

Rampura Agucha Mine

Reserve : 49.5mt Resource : 53.5mtReserve Grade : Zn 14.0%, Pb 1.9%Current Ore Capacity : 6.15 mtpa

Kayad Mine

Reserve : 7.3mt Resource : 0.8mtReserve Grade : Zn 9.6%, Pb 1.4%Current Ore Capacity : 0.35 mtpa

Chanderiya Smelting Complex

Pyrometallurgical Lead Zinc Smelter:

105,000 tpa Zinc and 85,000 tpa Lead

Hydrometallurgical Zinc Smelter: 420,000 tpa Zinc

Captive Power Plant: 234MW

Zinc Smelter Debari


Dariba Smelting Complex


Lead Smelter: 100,000 tpa Lead

Captive Power Plant: 160MW

Pantnagar & Haridwar

Processing & Refining of Zinc, Lead & Silver


Nyrstar

Hindustan Zinc

Glencore

Votorantim

Boliden

Tech

Industrias Penoles

NorandaHuludao ZincDongling

MMG

Minera Volan

Korea Zinc

VZI

Vedanta Group

0

200

400

600

800

1000

1200

1400

0 200 400 600 800 1000 1200

Min

e P

rod

uct

ion

(kt

Zn

)

Smelter Production (kt Zn)

4th Quartile

3rd Quartile

2nd Quartile

1st Quartile

5

Defining the Benchmark

Source: Wood Mackenzie Long Term Outlook Report, March 2015


Strong Track Record of Growth

6

Reserve & Resource (mt) – 2.5X Growth

Ore Production(mt) – 3X Growth Silver Metal – Integrated Saleable (MT) – 5.5X Growth

Mined metal (kt) – 3X Growth

54 67 69 77 80 89 102 97 109 110 104 108

9298 109

133 152183

197 216223 239 261 267

146165

178

210232

272299

313332

348365 375

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

Reserve Resource Net R&R

262 317 355472 505 551

651 683752 739 765 770 774

3647

54

6067

78

8486

88 92106 110 113

298364

409

532572

629

735769

840 830870 880 887

FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15

MIC - Zinc MIC - Lead Total Mined Metal

4735

1124

51

80

105

139148

202

288301

266


1.8 2.2 2.53.5 3.7 4.1

5 5.16.1 5.9 6.1

5.5 5.01.31.4

1.5

1.3 1.41.7

1.7 2

1.4 2.12.5 3.8

3.9

3.13.6

3.9

4.85.1

5.8

6.77.1

7.58.0

8.6

9.38.9


Ore (OC) Ore (UG) Total Ore Production


Rs bn

*Before Project Capex

-

10

20

30

40

50

60

70

80

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

EBITDA

-

10

20

30

40

50

60

70

80

90

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

PAT

-

50

100

150

200

250

300

350

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

Cash & Cash Equivalents*

-

5

10

15

20

25

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

EPS

-

100

200

300

400

500

600

700

800

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

Market Cap

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

LME Price

Zinc LME

Lead LME

EBITDA CAGR 29% despite Zinc LME growth of only 7%

Rs $/MT

Rs bn Rs bn

Rs bn

Robust Financial Performance

7


2013-14 2020-21

RA OC RA UG Kayad SKM RDM ZWM BKM

Way Forward

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� Resource driven growth

� Six major projects to increase mined metal capacity by 20% to 1.2 mtpa, including replacement from RAM OC

� Total capex of $1.5 billion, out of which ~$0.5 bn is spent

� Expansion of mines in sync with increasing R&R

� Extension of RAM OC mine life to FY20 to smoothen transition to UG

Future mine production profileTransition to underground mining (% share in MIC)

0%

20%

40%

60%

80%

100%

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21

Open-Cast Underground

Journey ahead - Projects

RAM UG RajpuraDariba

SindesarKhurd

Kayad Zawar BamniaKalan

3.75 1.75 3.8

1.2 0.5

0.3 2 0.65

0.350.9

Current Capacity, (mtpa)

Capacity Addition, (mtpa)

0%

20%

40%

60%

80%

100%

2014-15 2020-21

Ore Production

0%

20%

40%

60%

80%

100%

2014-15 2020-21

MIC Production


Rampura Agucha Mine

9

Added: Added legend for clarity of current Open pit depth and pit extension

Shaft Access

South

Ventilation

Shaft

North

Ventilation

Shaft

Main

Hoisting

Shaft

Main

Decline Open Pit

Extension shell

Underground resource:

As Built

development

Open Pit

To Feb 2015

Open Pit

Ultimate Pit Depth: 420 meters from surface

Mine Life: FY 2019-20

UG Mine

Production Capacity: 3.75 mtpa

Mine Life: +20 years

R&R: 35.2 mn MT & 55.1 mn MT

Mining Method: LHS with paste fill

Major Activities:

� Decline and ancillary development

� Production shaft & crusher system

� Raise boring

� Paste fill plant

� Surface infrastructures

Shaft

� Hoisting Capacity: 3.75 mtpa

� Shaft Dimension: 7.5 m Dia., 950m deep

High Lead Content Deposit

RA UG14 OB


Vent. Raise

Vent. RaiseDeclines

Production Shaft

Underground Crusher

& Loading Stations

Ore & Waste Passes

Sindesar Khurd Mine

10

Salient Features

� Access to mine: Through two ramps

� Method of working: Blast hole open stopingLHS with back filling

� Ore hauling: Ramps & shaft

� Mine ventilation: Two ventilation shafts (Peripheral)

� Production capacity : 3.75mtpa

Particulars Main Ore Body Main Ore Body + Auxiliary Lenses

R&R* 37 mn tonnes 106 mn tonnes

Capacity 2 mtpa 3.75 mtpa

Main Ore Body

SK6

SK2

*as on March 31, 2015


40%

50%

60%

70%

80%

90%

100%

20102011201220132014201520162017201820192020

Emerging Markets Developmed Economies

Global Refined Zinc Market Overview

11

Source: Wood Mackenzie Long Term Outlook Report, March 2015

‘000 MT

EM share in global

demand to increase 10% in 10 years

‘000 MT

World - Steady demand growth at 4-5%China - CAGR (2013-2020) 6.2%India - CAGR (2013-2020) 5.7%

Emerging Markets Driving DemandRefined Market Balance

India Steel Production and Zinc Demand

Mn MT

Source: Feedback Consulting & HZL

Source: Wood Mackenzie Long Term Outlook Report, March 2015 6469

7275

7884

502

533

577

629 617

648

60

65

70

75

80

85

90

95

400

450

500

550

600

650

700

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 E

Steel Production (RH) Zinc Demand (LH)

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

2015 2016 2017 2018 2019 2020

Consumption Supply


Among the lowest cost producers of zinc

Source: Wood Mackenzie Research

Leading the way with fully integrated operations

Hindustan Zinc

Teck

Glencore Xstrata

MMG Limited

Boliden Nyrstar

0 10 20 30 40 50 60 70 80 90 100

0

250

500

750

1000

1250

1500

1750

2000

2250

2500

C1 Cash Cost ($/t Zn)

Cumulative Production (Percentile)

Captive mines with Reserve & Resource base of 375.1 million MT ensuring mine life of 25 years

Integrated metal production supported by captive power plants

Low cost of operations driven by quality assets and multi-metal recovery

Market leadership in India with strong presence in emerging economies of Asia

Summary

Core Strengths

12


Reserve & Resource

14

As on March 31, 2015

HZL Presentation June'15 Philip Capital- Final Largest zinc-lead smelter globally: 1 million+ MT of...

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