The central government’s infrastructure push will see Indian zinc consumption grow 3-5% in the medium term as against projections of 2% growth in global demand, says Arun Misra, CEO, Hindustan Zinc Ltd.
The demand will be triggered by the consumption of galvanised steel that will be needed for highways and high speed rail projects, he said. Automobile sector is another area that will drive demand. Galvanised steel has zinc coating as an extra protection layer.
“The government is estimating the steel production to double from 150 million tonnes to 300 million tonnes by 2030. Typically 75 million tonnes out of this could be flat steel. That is the equivalent quantity of galvanisation. Due to this, we will see another 3-5% growth in zinc consumption itself. The world is growing at around 2%. India is the only country where there is a chance of zinc growing from 3-5%, because our consumption per capita is around 0.3 tonnes”, Misra said. “The crash barriers for highways and railway lines for high speed rails are all using galvanised steel. Steel consumption will grow through automobiles too”.
According to Misra, India’s annual zinc consumption is in the range of 650,000 tonnes to 680,000 tonnes while Hindustan Zinc produces around 800,000 tonnes a year. “We have more than we consume. If India meets about 20% of its zinc consumption through imports, we export about 30% of our production”, he explains.
Hindustan Zinc exports are mainly focusing on South East Asia. The company has started exporting to Europe too. “Europe has a problem of energy, so till the time the Russia-Ukraine conflict is solved, their smelters may not make money. That is the time we are selling in Europe”, Misra said.
The company is also eying more Zinc deposits in India. “We are waiting for the government to put them up for auction”, he adds.
On January 19, Hindustan Zinc board had approved the acquisition of the zinc assets its parent company Vedanta has in South Africa and Namibia. While the company stated that the transaction will improve overall synergies between the businesses, market share gains as well as geographical diversification to a mineral-rich African continent, it is yet to clear necessary statutory approvals.
