At Hindustan Zinc, our journey towards sustainable outcomes is marked by iconic milestones. FY 2021-22 was a year of celebrating many such landmark moments, each of which inspired us to become even more courageous in our approach. Events encouraged us to become more ambitious about our plans and optimistic about our prospects. We were motivated to embark on the next phase of our journey to achieve every big, hairy, audacious goal that we set for ourselves to scale higher and more sustainable growth, balanced with greater value creation.
Notably, FY 2021-22 was the year when we surpassed the one million tonne production mark, to touch a historic 1,017 kt in mined metal production. We are also pleased to report a record-breaking annual refined metal production of 967 kt and the highest-ever mine development of 107 kilometres. What is remarkable is that we recorded these feats while maintaining our mine life at 25 years – a significant achievement given the complex backdrop in which we largely operate.
As you may be aware, when we embarked on our production expansion journey, we were looking at renewed positivity in the external environment. While we were hoping that the worst of the pandemic was behind us, the second and more deadly Delta wave put roadblocks in the way of realisation of our ambitions. And yet, despite these challenges, I am happy to say that, led by our inherent resilience, we moved with agility to get back on track with our futuristic growth plans.
Sadly, however, we were soon confronted by another hurdle in the form of persistent commodity pressure and energy uncertainty. Though these concerns had been putting a squeeze on our margins even earlier, the geopolitical tensions triggered by the Russia-Ukraine situation further exacerbated them. Faced with these aggravated stresses, we once again moved deftly and intently towards implementation of our plans through prompt and impactful initiatives. We put our best foot forward to strengthen our efforts on operational efficiencies, volume delivery and cost rationalisation for expanding our production volumes and driving financial excellence.
These efforts have given us the confidence to strive and aim to grow volume to 1.5 million tonnes, while maintaining grades and improving efficiencies. As we surge ahead towards the fulfilment of our ambitions, we are also looking at expanding our footprint in the production of zinc alloys and have obtained the Consent to Establish (CTE) a 30 kt plant for Hindustan Zinc Alloys Private Limited (HZAPL). This will pave the way for production of value-added zinc alloy products and enable us to deliver international quality in the domestic market.
At the same time, we remain committed to our vision to be amongst the top-3 primary silver producers globally, from our current 6th position. With current silver production at around 700 tonnes and production capacity of 800 tonnes, we are confident to march ahead with our production growth over the medium-term.
The commissioning of our fumer plant will further equip us to achieve our big, bold new targets across silver and other minor metals.
To power these ambitious plans, we shall continue to focus on enhancing our digital outreach to further scale our value proposition for stakeholders. I am pleased to share that our focussed automation and technology-centric efforts during FY 2021-22 were recognised by the Confederation of Indian Industry, which awarded us with the CII-Dx award for ‘Best Practice in Digital Transformation 2021’. We were also honoured with the ‘Most Innovative Best Practice – Supply Chain & Logistics Innovations’ award during the year.
It is important to point out here that the ambitious goals we have mapped for ourselves are part of our larger vision for the future, which is rooted in our strong sustainability ethos. We believe in creating value that goes beyond numbers, to encompass benefit that we create for our stakeholders and the long-term positive impact of our business on the environment.
Our unwavering commitment to the creation of a greener tomorrow is integral to this vision, which finds resonance in our top rankings and awards on the sustainability front. I am happy to share that while maintaining our first rank for the fifth consecutive year in Asia Pacific in the Dow Jones Sustainability Index (DJSI) amongst metal and mining peers, we are #1 globally in the environment dimension. Winning the prestigious ‘Outstanding Accomplishment in Corporate Excellence’ and the recognition of Dariba smelter for ‘Excellence in Environment Management’ at the 16th CII-ITC Sustainability Award 2021 are achievements that reinforce our focussed environmental strategic approach, along with our ranking in the Top 100 Global Companies by the Global Sustainability Magazine.
Another notable feather in our cap is the presentation of the ‘Most Sustainable Company in the Mining Industry – 2021’ award from the World Finance Sustainability Award 2021. It is also a matter of pride for us that Hindustan Zinc continues to be certified as a Water Positive Company, a member of the FTSE4Good Index for ethical stock market investments, an intrinsic part of the S&P Global Sustainability Yearbook 2022 and a Bronze Medal winner at the S&P Global Sustainability Awards. The CII ‘Best Application & Use of Renewable Energy’ award received by Rampura Agucha Mine at the 5th Edition CII National Energy Efficiency Circle-2021 further validates the importance we accord to carbon neutrality. All these exhilarating feats give us the confidence to move proactively forward to deliver on our ESG vision and our commitment to net-zero by 2050.
I would also like to share here that the Company has received the Board’s approval to undertake a long-term captive renewable power development plan – up to a capacity of 200 MW – in furtherance of its net-zero goal. The move is in line with our strategic purpose of reducing dependence on thermal power by scaling up our renewable energy to cover 50% of our energy requirement in the next three years and reduce the GHG emissions from our operations. During FY 2021-22, we also signed an MoU with CDP science-based incubator programme for setting targets for our net-zero commitment.
Additionally, we inked two key MoUs to introduce battery powered equipment and vehicles in underground mining. The MoUs with Finland’s Normet Group and Sweden’s Sandvik AB will aid our efforts to achieve our aim of inducting electric and battery operated equipment against equipment that goes for replacement five years from now. We have already launched passenger EVs to reduce our carbon footprint. We are also working on plans to charge our electric fleet using our own solar power thus completing the end-to-end environment-friendly cycle. We are also committed to invest US$ 1 billion over the next five years in our climate change initiatives, which will further enhance our ESG value proposition.
It is important to note that our audacious goals are not only designed to drive Hindustan Zinc’s sustainability targets, but also inspire our people to dream big, both for the organisation and for themselves. We truly recognise their contribution, and continue to invest in their holistic growth, welfare and well-being. We reaffirmed this commitment during FY 2021-22 with a host of medical and other support measures, which were extended to our employees and business partners amidst the pandemic.
The people-centric awards we received during the year endorses the success of our efforts while motivating us to expand the ambit of our HR vision and programmes. It also propels us towards our goal of achieving 30% diversity in an inclusive and diverse workforce by 2025. Having broken several glass ceilings for the mining industry in terms of women’s employment in many critical roles in the organisation, Hindustan Zinc remains dedicated to further promoting gender equality through targeted initiatives. Our focus on safety is a non-negotiable as we continue to work concertedly towards ensuring a ‘zero injury’ work environment.
As we accelerate towards a better and brighter tomorrow, we look back at the journey of the past year as an inspiring narrative that has augmented our confidence in our ability to aim higher, to achieve bigger goals.
We see the acknowledgement of this ability in the chairmanship role that has been vested in the organisation by the International Zinc Association (IZA). We will work closely with the global community to grow the international demand for zinc and promote its essentiality to human health, crop nutrition, sustainable development, and modern life. We shall continue to align ourselves with the industry body and work closely as thought partners to co-create a world vision for the industry.
Our strong conviction in our potential to create and deliver long-lasting value for all our stakeholders, including the communities around us, will lead us towards accomplishing even bigger goals and more remarkable celebrations. Fiscal discipline and its management, backed by investment in sustainability and CSR, will be the key priorities of our onward journey, synced with further improvement in equipment reliability and availability. Together, these will empower us to effectively capitalise on the growth opportunities ahead, to create a better world for all.
Sincerely,
