Hindustan Zinc, a subsidiary of Vedanta Group and India’s largest integrated zinc producer, has approved a ₹12,000 crore ($1.39 billion) investment to construct a new 250,000-tonne-per-annum integrated zinc metal complex at Debari, Rajasthan. The project, part of the company’s “2X growth” strategy to double production capacity across zinc, lead, and silver, is scheduled for completion within 36 months and will be financed through internal accruals and debt. The announcement comes as India’s zinc demand is projected to double over the next 5-10 years, driven by infrastructure development and steel production targets.
Expansion Targets Surging Domestic Demand
The timing of Hindustan Zinc’s capacity expansion aligns with India’s ambitious industrial growth targets. The government aims to increase steel production from the current 151.1 million tonnes to 300 million tonnes per annum by 2030, directly impacting zinc demand since approximately 50% of zinc consumption is for galvanizing steel to prevent corrosion. According to the International Zinc Association, India’s current zinc consumption stands at 1.1 million tonnes annually, with per capita consumption significantly lower than the global average.
The new Debari facility will increase Hindustan Zinc’s total smelting capacity from 1.129 million tonnes per annum to 1.379 million tonnes, with plans to eventually reach 2 million tonnes. The expansion includes associated mining and milling capacity increases to 35 million tonnes per annum and will boost silver refining capacity from 800 to 1,500 tonnes annually. The company currently operates at 93% capacity utilization across its existing facilities.
Market Position and Financial Performance
Hindustan Zinc dominates India’s primary zinc market with a 77% share and ranks as the world’s second-largest integrated zinc producer. The company reported strong financial performance in FY2025, with revenue of ₹34,083 crore ($4.1 billion) (up 18% year-on-year) and net profit of ₹10,353 crore ($1.2 billion) (up 33% year-on-year). EBITDA reached ₹17,465 crore ($2.1 billion) with an industry-leading margin of approximately 51%.
Following the expansion announcement, the company’s shares declined 4.5%, partly due to market concerns about near-term capital allocation and reports of potential share sales by parent company Vedanta.
Sustainability Focus and Green Zinc Production
Hindustan Zinc has positioned itself as a leader in sustainable mining practices, ranking first globally among metals and mining companies in the S&P Global Corporate Sustainability Assessment 2024 with a score of 86 points. The company has achieved a 14% reduction in greenhouse gas emission intensity over the past four years through renewable energy integration and operational efficiency improvements.
The company’s EcoZen brand represents Asia’s first low-carbon “green” zinc, produced using renewable energy with a carbon footprint 75% lower than global industry averages. The company operates its Pantnagar Metal Plant entirely on green power and has secured a 450 MW renewable power delivery agreement.
Zinc Market Overview
Zinc is essential for galvanizing steel to prevent corrosion, with additional applications in die-casting, batteries, and chemical compounds. The metal plays a crucial role in infrastructure development, renewable energy systems, and electric vehicles. Global zinc markets have experienced supply deficits in recent years, supporting price levels and expansion investments. India’s infrastructure development plans, including the National Infrastructure Pipeline and Gati Shakti Yojana, are expected to drive sustained demand growth. The International Zinc Association estimates that 5% of India’s GDP is lost annually to corrosion, highlighting the economic importance of zinc-based protection systems for the country’s extensive coastline and diverse climatic conditions.
Company Background and Market Context
Hindustan Zinc Limited is a subsidiary of Vedanta Limited, operating world-class underground mines including Rampura Agucha (the world’s largest underground zinc mine) and Sindesar Khurd in Rajasthan. The company has increased its metal reserves by over three times in the past five years and maintains over 25 years of mine life. Vedanta holds a majority stake in Hindustan Zinc.
The company serves over 40 countries and has been recognized for integrating women into night shifts at underground mining operations, marking progress in gender diversity within the traditionally male-dominated industry.
