Zn India Metal Bulletin, London May06

20 May 2006 Zinc Metal Industry in India©MECON LIMITED, Bangalore

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Zinc Metals Industry in IndiaZinc Metals Industry in India1010thth Zinc & its Market SeminarZinc & its Market Seminar

24th – 26th May, 2006Sheraton Park Lane Hotel, London


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Zinc Metal Industry in India Zinc Metal Industry in India

Presentation By:D.K. Basu@, B.C. Kabra#, P.R.Chandna#, S.Roy$

@ -General Manager In charge, # Deputy. General Manager, $ - Asst. General Manager


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CONTENTSCONTENTSIndian Zinc HeritageSectoral Zinc Consumption in India & the World.Growth of Indian Zinc industry Indian Zinc Industry among Top 5 producersIndian Zinc Mines & ReservesIndian Zinc Smelting Capacities & ProductionsIndian Zinc Demand & Supply.Drivers for Zinc Growth in IndiaFuture Indian Zinc ScenarioIndian Zinc Cash CostsAn Introduction to MECON LimitedIndian Lead – Zinc Industry & MECON’s AssociationConclusions


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Indian Zinc HeritageIndian Zinc HeritageZinc in India has a rich history and heritage. Lead & Zinc metals have been known in India during Vedic times.The excavation work carried out by British Museum, MS university and HZL at Zawar Mines and existing slag heaps at various ancient mining sites at Rajasthan provide conclusive proof of highly developed extractive metallurgical technology for zinc metal in India.American Society of Metals (ASM) recognised these sites at Zawar Mines as one of the International Historical Landmarks.Picture Courtesy HZL

Ancient Zinc Retorts at Zawar Mines


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USES OF ZINCUSES OF ZINCZinc’s largest single use is in the corrosion protection. Galvanizing is the main method of protection against corrosion of steel, i.e., the steel is coated with a layer of zinc in order to protect it from decay.Brasses are alloys of copper and zinc, and they have good mechanical properties and good corrosion resistance.Die casting are precision casting that can be mass-produced. Rolled zinc is used for architectural and building applications, and for dry cell batteries.Zinc oxide has its main use in tyres and rubber products. Many other zinc chemicals are used in a wide range of applications. Health - humans and animals alike need zinc in their food for good health and healing of wounds


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Sectoral Zinc Consumption in IndiaSectoral Zinc Consumption in India


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World Zinc UsesWorld Zinc UsesFIRST USE FOR ZINC END USE FOR ZINC


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World’s Top 5 Zinc World’s Top 5 Zinc –– Lead MinesLead Mines

Mines Capacity k t/yr

Brunswick 70 260

Lead ZincRed Dog 125 570Century 80 500Antamina - 320Rampura Agucha 25 375

TOTAL 300 2025Source: ILZSG/ Private Communication


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Growth of Indian Zinc IndustryGrowth of Indian Zinc Industry

1967:10,000 TPA BINANI Zinc Smelter, at Alwaye (RLE Process). 1968:18,000 TPA HZL Zinc Smelter, at Debari (RLE Process) 1977:27,000 TPA HZL Zinc Smelter, at Debari (RLE Process)1978:30,000 TPA HZL Zinc Smelter, at Vizag (RLE Process) 1983:4,000 TPA HZL Zinc Smelter, at Debari (Conversion Process) 1991:70,000 TPA HZL Zinc Smelter, at Chanderiya (ISF Process) 1995:20,000 TPA BINANI Zinc Smelter, at Alwaye (Expansion)2001:10,000 TPA HZL Zinc Smelter, at Debari (Expansion) 2001:10,000 TPA HZL Zinc Smelter, at Vizag (Expansion)2005:170,000 TPA HZL Zinc Smelter, at Chanderiya (New RLE Process) 2005:8,000 TPA BINANI Zinc Smelter, at Alwaye (Expansion)


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Location of Major Zinc MinesLocation of Major Zinc Mines


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Indian Zinc Mines ReservesIndian Zinc Mines Reserves

Resources ReservesMeasures &

indicatedInferred Proved &

ProbableQty. Zn% Pb

%Qty. Zn% Pb% Qty. Zn

%Pb%

Rampura Agucha

11.1 12.7 1.7 13.8 12.2 1.7 50.1 12.8 1.9

Rajpura Dariba

12.2 7.5 2.5 19.6 5.7 2.1 10.6 5.9 1.7

Zawar 22.5 4.8 1.9 13.8 3.7 3.1 5.8 4.4 1.8Kayar 0.8 13.3 2.2 4.5 11.0 1.5Total 46.6 7.5 2.0 51.7 7.4 2.2 66.5 11.0 1.9

MINESIn Million tonnes as on 31st March 2004

Source: HZL Annual Report


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Indian Zinc Smelter CapacitiesIndian Zinc Smelter Capacities

Zinc Smelters Capacity t/yrDebari Zinc Smelter 80,000 ( RLE Process)Vizag Zinc Smelter 56,000 (RLE Process)CLZS, Chanderiya 105,000 (ISF Process)CLZS, Chanderiya 170,000 (RLE Process)Binani Zinc Smelter 38,000 (RLE Process)CLZS, Chanderiya(Under Implementation)

170,000 (RLE Process)


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Indian Refined Zinc ProductionsIndian Refined Zinc ProductionsYear HZL BZL Total

2000-01 148,092 29,923 178,055

2001-02 176,395 28,814 205,209

2002-03 207,066 28,459 235,525

2003-04 220,664 29,218 249,882

2004-05 212,445 26,346 238,791

2005-06 284,000 18,200E 302,200E

Note: E – EstimatesSource: MMR/ Annual Reports- HZL/BZL


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World Refined Zinc ProductionsWorld Refined Zinc Productions(in Thousand Tonnes)

2002 2003 2004 2005

Europe 2,914 2,741 2,721 2,649

Africa 147 194 259 273

America 1,903 1,930 1,993 1,889

Asia 4,189 4,450 4,912 5,051

Oceania 567 553 474 457

Total 9,720 9,868 10,359 10,319

Source: ILZSG


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Indian Zinc Indian Zinc –– Demand & SupplyDemand & Supply

Year Demand Supply Gaps % Satisfaction

2004-05 400,000 239,000 161,000 60

2009-10 650,000 540,000 110,000 83

2014-15 960,000 557,000 403,000 58

2019-20 1410,000 557,000 853,000 40


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Drivers for Indian Zinc GrowthDrivers for Indian Zinc Growth

India’s real GDP growth @ 8.4%; 7.5% & 8.1% for the past three years.Industrial production has grown @ 7.1%, 8.1% and 9.4% in the same years.Increased activities in the manufacturing sectors.Continuing liberalisation.Infrastructure growth – recent setting up of Infrastructure Bank will further boost the demand.


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Expected Future GrowthsExpected Future Growths

India: 10-12%China: 15-17%USA: 9%World: 3-4%

Source: ILZSG


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ZINC PRICESZINC PRICESMainly two factors – shortage of zinc concentrate & investment opportunity have led to the growth in the present zinc prices worldwide. Further increase would be detrimental to zinc demand growths in the small & medium sector.


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Cash Costs for Zinc Cash Costs for Zinc

0

10

20

30

40

50

60

2000-01 2001-02 2002-03 2003-04 2004-05

Years

US Ce

nts/lb.

Source:: HZL Annual Reports

Trend Line

Indian cash costs are one among the lowest worldwide.


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Future Indian Zinc ScenarioFuture Indian Zinc ScenarioIn the past six years zinc metal productions in the country has increased by ~70%.Per capita consumption of zinc is only ~ 0.4 kg; quite low as compared to developed countries & world averages - indicating great potential for further growths.On commissioning of the new zinc smelter of 170,000 TPA by March2008; percent demand satisfaction will rise to 80 -83%.However, ten years from now; self sufficiency will again fall back to the present levels of 60%.Therefore, before 2010 setting up of an additional Zinc Smeltingcapacities would be an imperative. Export potential to our neighbouring country - China would further shorten this time frame.At the preset levels of productions the existing mines reserves would only be sufficient for the next 15-18 years, unless augmented by new explorations.


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An Introduction An Introduction -- MECON LIMITEDMECON LIMITED

MECON Limited is the India’s frontline engineering, consultancy and contracting organisation, offering full range of services for setting up of Projects from Concept to Commissioning including EPC/ Turn-key execution. It is a multi-disciplinary company with 950 experienced engineers, scientists and technologist, having a network of offices spread over the country. Areas of activities are:Iron & steel Non-Ferrous metalsPowerOil & GasInfrastructure


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Indian Lead Zinc SmeltersIndian Lead Zinc Smelters&

MECON’s ASSOCIATIONMECON’s ASSOCIATION


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Chanderiya Lead Zinc SmelterChanderiya Lead Zinc Smelter

Chronology of Events for Execution of CLZS Plant:1977: Discovery of Rampura Agucha Mines.1980: Takeover of Mines by HZL1982: Preparation of mining Feasibility Report – SNC, Canada.1982: Preparation of Smelting Pre-Feasibility Report – Stolberg, Germany.1982: Preparation of Smelting bankable Feasibility Report – MECON.1987: Execution of setting up of plant in Two phases:

Phase-I: Preparation of Firm Cost Estimates ± 5% - MECON.Phase-II: Detailed Engineering, Site Construction & PMC – MECON.

1991: Lead Refinery Commissioned in March.ISF plant Commissioned in October.


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Chanderiya Lead Zinc SmelterChanderiya Lead Zinc SmelterSalient Features:Plant Capacities:

Zinc: 70,000 TPALead: 35,000 TPASulphuric Acid: 160,000 TPACadmium: 235 TPASilver: 50 TPAThe plant was commissioned within the time schedule, in spite ofdeterrents during the execution period like; oil crisis during Iran-Iraq war & change in the lead technology from Electro-refining to Pyro-refining and the project was commissioned within budgets Capex of Rs 5170 Million..


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Chanderiya Lead Zinc SmelterChanderiya Lead Zinc SmelterMETHODOLOGY OF IMPLEMENTATION:

The project was implemented in two phases on Turn-key Concept for the main process units.Phase- I:

Basic Engineering & Firming up of scopeProcurement activities before commitmentPreparation of Firm Cost Estimates within an accuracy of ± 5%.

Phase-II:ProcurementErection/ constructionCommissioning


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Chanderiya Lead Zinc SmelterChanderiya Lead Zinc SmelterMETHODOLOGY OF IMPLEMENTATION:Various Turnkey Packages:

1. Raw Material storage & handling plant 9. Sulphuric acid plant

2. Sintering & Gas Cleaning Plant 10. Effluent Treatment plant

3. Imperial Smelting Furnace Plant 11. Power Distribution & Lighting

4. Zinc Pyro- Refining 12. Auxiliary Power & DG Sets

5.Lead Electro-Refining & Minor Metals plant 13. Water Supply System

6. Copper Recovery (SX-EW) plant 14. Utility System

7. Precious Metals plant 15. Telecommunication

8. Cadmium Plant


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Debari Zinc Plant ExpansionDebari Zinc Plant ExpansionServices Rendered:

1991: FR for Revamping of RA Plant –I.1992: Technology Selection & Feasibility

Study – RLE vis-à-vis Pressure Leach Processes.

1997: FR for Expansion of Debari Zinc Smelter plant by 10,000 TPA.

2001: Expansion & Performance of Debari Zinc Smelter by 10,000 TPA – M/s AdZ Technology.Presently plant is producing more than 75,000 TPA.


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Vizag Zinc Plant ExpansionVizag Zinc Plant ExpansionServices Rendered:

1997: FR for Expansion of Vizag Zinc Smelter plant by 10,000 TPA.

2001: Expansion & Performance of Vizag Zinc Smelter by 10,000 TPA – M/s AdZ Technology.Presently plant is Producing more than 50,000 TPA of Zinc.


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Vizag Lead Plant ExpansionVizag Lead Plant Expansion

Services Rendered:1987: FR for Modernisation of Lead

Refineries at Tundoo & Vizag Lead Smelter plants.

1989: Detailed Engineering & Project Management of Lead Refinery Modernisation – MIM Technology.

1999: 22,000 TPA Lead Smelter Plant – Due Diligence & Health Study.


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Chanderiya Lead Plant ExpansionChanderiya Lead Plant Expansion


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Chanderiya Lead Plant ExpansionChanderiya Lead Plant Expansion

First Slag TapeConstruction of Ausmelt Furnace


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Salient Features Salient Features –– CLZS Lead Plant ExpansionCLZS Lead Plant Expansion

Capacity: 50,000 TPA Lead BullionKnow-how & Technology: M/s Ausmelt, AustraliaImplementation Philosophy:Project Cost

Non- Turnkey (10 Nos. Major Packages)

Project Cost: $ 35 Million.Schedule: 24 MonthsCivil/ Structural Quantities: Excavation: 11,200 Cub.m.

RCC: 6,000 Cub.m.Steel Structures: 1,650 tonnes.

The plant has been completed within the time schedule and the quality of the work has been appreciated by the Process licensor – M/s Ausmelt, Australia..


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Indian Lead Smelter capacitiesIndian Lead Smelter capacities

Lead Smelters: Capacities TPA:

CLZS, Chanderiya 35,000 (ISF - Process)

CLZS, Chanderiya 50,000 (Ausmelt Process)

TOTAL 85,000


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Other Assignments in Zinc IndustryOther Assignments in Zinc Industry

TEFR, Basic Engineering, & Procurement services, for Ganesh Himal – Lead Zinc Project, - M/s Nepal Metal Company Ltd.Formulation Report for setting up of Zinc Smelter plant of 60,000 TPA, Kapasan – M/s Hindustan Zinc ltd..Setting up of 100,000 TPA Zinc Ingots Custom based Zinc Smelter Plant - M/s Sterlite Industries Ltd.Site Selection report for setting up of 170,000 TPA Zinc Smelter Plant – M/s Hindustan Zinc Ltd.


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ConclusionsConclusionsTo accept the present challenges by the Indian Zinc Industry, adaptation of some of the following measures are imperative in the near future to aim self sufficiency of the zinc metals in India:Explorations at a greater pace to discover the new economically feasible Zinc mineral resources. Setting up of new Zinc Smelters with economy of scale capacities & environmental sustainability between the years 2010 - 2015.Technological up gradation to improve metal recoveries & productivities and to reduce cash costs at the existing Mines and Smelting operations, like setting up of mechanized tank houses etc.Recovery of Metal values from the process wastes like leach residues/ EAF dusts/ tailings etc., by adopting the low investment capital cost & environmentally sound technology.Indian consultancy need to play a more proactive role in the absorption of the new technologies, development of basic know-how & engineering in areas other than proprietary equipment/technologies and to execute the projects within the budgeted costs & time schedules.


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AcknowledgementAcknowledgement

The permission from MECON Limited to write and present this paper is gratefully acknowledged. Authors also thankfully acknowledges the various sources of information/ data.


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THANK YOUTHANK YOUMECON LIMITED# 89, Southend Road,Basavanagudi,Bangalore – 560 004, Karnataka – INDIATel:+91-80-26571661 to 1668Fax: +91-80-26576352E-mail: [email protected] or [email protected] site: www.mecon.co.in

mailto:[email protected]

mailto:[email protected]

http://www.mecon.co.in/

Zn India Metal Bulletin, London May06

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