hzl presentation june'16 largest zinc-lead smelter globally: 1 million+ mt of production...
TRANSCRIPT
June 2016
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, Q1 2016
Long Term Outlook)
Hindustan Zinc Limited
Vision, Mission & Values
3
We want our employees to be ambassadors of our core values
To be the world’s largest and most admired zinc-lead
and silver company
� Enhance stakeholder value through exploration,
innovation, operational excellence and
sustainability
� Be the lowest cost producer
� Maintain market leadership & enhance customer
delight
� Entrepreneurship
� Care
� Excellence
� Respect
� Trust
� Innovation
� Integrity
Hindustan Zinc Limited
2.292.15
1.95
1.010.88
0.640.5
FY10 FY11 FY12 FY13 FY14 FY15 FY16*
LTIFR (per million man-hours worked)
Safety & Sustainability
4
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
Year Highlights
78%
*As per new ICMM Guidelines
0.50Lost time injury frequency rate
Rs. 42 CroreInvested in environment initiatives
100%Periodic medical examinations for all
applicable employees
0category 4 or 5 environmental
incidents
2,83,071Safety training hours delivered to
employees and contractors
100%units have Biodiversity Management
Plans in place
100%Assurance of all sites by our internal
audit programme (VSAP)
100%non-hazardous waste recycling
Hindustan Zinc Limited
500
800
1,100
1,400
1,700
2,000
0% 25% 50% 75% 100%
C1 C
ash C
ost
($/t
Zn)
Cumulative Production (Percentile)
Hin
dusta
n Z
inc
Among the lowest cost producers of zinc
Source: Wood Mackenzie Research
Leading the way with fully integrated operations
Captive mines with Reserve & Resource base of 389.9 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
Core Strengths
5
Hindustan Zinc Limited
Portfolio of Tier - 1 Assets
6
Zawar Mining Complex
Reserve : 9.5mt Resource : 82.3mtReserve Grade : Zn 3.4%, Pb 1.7%Current Ore Capacity : 1.20 mtpaCPP : 80MW
Wind Power Generation Capacity of 274 MW
Sindesar Khurd Mine
Reserve : 33.2mtResource : 76.3mtReserve Grade : Zn 4.7%, Pb 3.2%Current Ore Capacity : 3.00 mtpa
Rajpura Dariba Mine
Reserve : 9.3mt : Resource : 49.4mtReserve Grade : Zn 6.3%, Pb 1.6%Current Ore Capacity : 0.90 mtpa
Rampura Agucha Mine
Reserve : 51.1mt Resource : 52.7mtReserve Grade : Zn 14.0%, Pb 1.8%Current Ore Capacity : 6.15 mtpa
Kayad Mine
Reserve : 3.9mt Resource : 2.0mtReserve Grade : Zn 13.4%, Pb 1.8%Current Ore Capacity : 1.00 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
Hydrometallurgical Zinc Smelter: 88,000 tpa Zinc
Dariba Smelting Complex
Hydrometallurgical Zinc Smelter: 210,000 tpa Zinc
Lead Smelter: 100,000 tpa Lead
Captive Power Plant: 160MW
Pantnagar & Haridwar
Processing & Refining of Zinc, Lead & Silver
Hindustan Zinc Limited
Strong Track Record of Growth
7
Reserve & Resource (mt) – 2.5X Growth
Ore Production(mt) – 3X Growth Silver Metal – Integrated Saleable (MT) – 9X Growth
Mined metal (kt) – 3X Growth
54 67 69 77 80 89 102 97 109 110 104 108 107
9298 109
133 152183
197 216223 239 261 267 283
146165
178
210232
272299
313332
348365 375
390
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Reserve Resource Net R&R
262317 355
472 505 551651 683
752 739 765 770 774 744
3647
54
6067
78
8486
88 92106 110 113 145
298364
409
532572
629
735769
840 830870 880 887 889
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
MIC - Zinc MIC - Lead Total Mined Metal
1.8 2.2 2.53.5 3.7 4.1
5 5.16.1 5.9 6.1
5.5 5.0 4.51.31.4
1.5
1.3 1.41.7
1.7 2
1.4 2.12.5 3.8 4.4
6.0
3.13.6
3.9
4.85.1
5.8
6.77.1
7.58.0
8.6
9.3 9.4
10.5
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Ore (OC) Ore (UG) Total Ore Production
4735
1124
5180
105
139 148
202
288301
266
422
FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Hindustan Zinc Limited
Rs bn
*Before Project Capex
EBITDA CAGR 26% despite Zinc LME growth of only 9%
Rs $/MT
Rs bn Rs bn
Rs bn
Robust Financial Performance
8
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
EBITDA
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
PAT
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
Cash & Cash Equivalents*
-
5.00
10.00
15.00
20.00
25.00
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
FY16
EPS
-
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
FY16
LME Price
Zinc LME
Lead LME
-
100.00
200.00
300.00
400.00
500.00
600.00
700.00
800.00
900.00
FY
02
FY
04
FY
06
FY
08
FY
10
FY
12
FY
14
FY
16
Market Cap
Hindustan Zinc Limited
2013-14 2020-21
RA OC RA UG Kayad SKM RDM ZWM BKM
Way Forward
9
� 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 ~$0.6 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)
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
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
FY15 FY16 FY17 FY18 FY19 FY20 FY21
Underground Open-cast
Hindustan Zinc Limited
RAJASTHANFostering Self-Reliance through
Community Development
— Reaching to more than half a million people
in Rajasthan
— Positively impacting lives of more than
100,000 households in 358 Villages in
Rajasthan
— Members of United Nations Global Compact
(UNGC), TERI-BCSD (Business Council for
Sustainable Development) and National
Population Stabilization Fund
10
Community Engagement
Hindustan Zinc Limited
CSR Initiatives
Sports & CultureEducation Health, Water & Sanitation
— Sports Tournaments at district,
block and village level
— Cultural events
— Model School Development
— Vedanta Post Graduate college for
girls
— Vedanta Computer Literacy Program
— Vedanta- Hindustan Zinc Heart
Hospital, Udaipur
— Rural Safe Drinking Water Project
— Rural Sanitation Program
Sustainable Livelihood
(Farm & Non-farm)Women Empowerment
Environment Conservation
— Improved Agriculture Program
— Livestock Development Program
— Vocational Trainings
— SHG Development Program
— Capacity Building Interventions
— Income Generation Programs
— Mega Plantation Drive
— Water Conservation Drive
— Sewage Treatment Plant at Udaipur
11
THANK YOU!