Hindustan Zinc Limited · NSE:HINDZINC
Hindustan Zinc — Investor Day (August 2017)
40 slides from Hindustan Zinc's investor day presentation, Aug 30, 2017
Slide 1: Vedanta - Zinc Day
Vedanta - Zinc Day Hindustan Zinc Limited 30 August, 2017 VEDANTA | ZINC–LEAD–SILVER | OIL & GAS | ALUMINIUM | COPPER | IRON ORE | POWER
Slide 2: Cautionary Statement and Disclaimer
Cautionary Statement and Disclaimer The views expressed here may contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forwa
Slide 3: Agenda
Agenda 01 04 Corporate Overview Resource- Amitabh Gupta, CFO Driven Growth Scott Caithness, Head Exploration 02 05 Social Responsibility – Silver – Giving Back Fastest Growing Portfolio Neelima Khetan, Head CSR Sunil Duggal, CEO 03 06 Delivering 1.2 mtpa Way Forward Sunil Duggal, CEO Naveen Singhal,
Slide 4: Corporate Overview
01 Corporate Overview Amitabh Gupta, CFO
Slide 5: Corporate Overview
Corporate Overview 2nd largest zinc-lead miner globally with 12 million+ MT of ore production capacity Rampura Agucha: 2nd largest zinc mine globally 4th largest zinc-lead smelter globally: 1 million+ MT of production capacity 18th largest silver producer of the world* One of the lowest cost zinc pr
Slide 6: What Differentiates Us?
What Differentiates Us? Core Strengths Among the Lowest Cost Producers of Zinc Zinc Mine Composite Costs Curve Captive mines with R&R base of 2500 1 404.4 million MT ensuring mine life of 25+ years 2250 Peer 5 2000 Peer 4 C1 Cash Cost ($/t Zn) Peer 3 1750 Peer 2 Integrated metal production Hindustan
Slide 7: Safety & Environment – Vision Zero Harm
Safety & Environment – Vision Zero Harm LTIFR Trend Water Conservation • Zero discharge Specific Water Consumption (M3 / MT of MIC) 14.56 13.78 13.70 • 33% total water requirement met from recycling/ reuse water (2017) • Water CDP 15-16 16-17 17-18 (Target) disclosure 2017 Climate Change & Energy •
Slide 8: Portfolio of Tier-1 Assets
Portfolio of Tier - 1 Assets Rampura Agucha Mine Reserves : 49.7 mn MT Resources : 50.3 mn MT Reserve Grade : Zn 13.9%, Pb 1.9% Chanderiya Smelting Complex Current Ore Capacity : 6.15 mtpa Pyrometallurgical Lead Zinc Smelter: 1,05,000 MTpa zinc and 35,000 MTpa lead Kayad Mine Hydrometallurgical Zinc
Slide 9: Strong Track Record of Growth
Strong Track Record of Growth Reserves & Resources (mn MT) – 2.5X Growth Mined Metal (kt) – 3X Growth 404 390 880 887 889 907 365 375 840 830 870 348 769 332 313 735 88 106 110 113 145 151 299 92 272 629 84 86 572 232 532 210 283 295 78 239 261 267 67 178 223 409 60 165 197 216 364 146 183 298 152 5
Slide 10: Robust Financial Performance
Robust Financial Performance EBITDA Rs. bn PAT Rs. bn Cash & Cash Equivalents* Rs. bn 90.00 400.00 Special 80.00 350.00 Dividend 70.00 payout 300.00 60.00 250.00 50.00 200.00 40.00 150.00 30.00 100.00 20.00 10.00 50.00 - - FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY
Slide 11: Cost Journey
Cost Journey Post commissioning of shafts at RA & SK mines Mined Metal & COP Trend kt 900 870 1400 835 844 830 804 800 800 1200 700 1000 600 500 137 210 800 249 345 481 400 1200 600 300 400 733 200 670 638 544 426 200 100 0 0 FY13 FY14 FY15 FY16 FY17 Target OC (kt) UG Mines (kt) Zinc COP excl royalt
Slide 12: Corporate Social Responsibility
02 Corporate Social Responsibility Neelima Khetan Head CSR
Slide 13: Corporate Social Responsibility
Corporate Social Responsibility Vision To enhance the quality of life and economic well being of communities around our operations. Goals • To positively & holistically impact the quality of life of the communities living around our areas of operation. • To work in partnership through a multi-stakeh
Slide 14: Principles & Focus areas
Principles & Focus areas Core Principles Thematic Areas Neighbourhood Communities Our first and foremost commitment The Partnership Multiplier Work, as much as possible, through strong and credible local partners Impact Centric In almost everything we do, we focus on impact rather than on spends Str
Slide 15: Touching Lives of Neighbourhood Communities
Touching Lives of Neighbourhood Communities Nandghar; Khushi Anganwadi Children (0-6 Years) ‘Ajmer Dargah Complex’ – A Swachh iconic place Shiksha Sambal Culture Students Unchi Udaan HZL Mining Academy Clean Ayad river, the lifeline of Udaipur (STP) Environment Communities Rural Youth Football Acade
Slide 16: Delivering 1.2 mtpa
03 Naveen Singhal Director Projects
Slide 17: History of Project Delivery
History of Project Delivery Captive Power MW 474 MW 394 314 80 MW 80 MW Debari 234 80 MW Dariba 154 80 MW Zawar 2017 2*77 MW Chanderiya SKM 3 to 3.7 mtpa Chanderiya RAUG 1.4 mtpa SK Mill commissioned 2005 2008 2009 2010 2011 2016 SKM 2 to 3 mtpa 2013 2012 Production commenced at Pb Smelter Dariba (1
Slide 18: Mine Expansion Project Overview
Mine Expansion Project Overview Underground Mines Capacity Expansion 3.8 mtpa 17.5 mtpa 4.0 3.3 4.5 2.0 1.2 0.9 1.0 0.6 RAUG SKM Kayad Zawar RDM Pre Expansion Planned (FY 2020) OC to UG Transition UG ramp up 17.5 5 year CAGR 39% 12.1 10.5 9.3 9.4 • Mine expansions in sync with increasing R&R 17.5 3.
Slide 19: Underground Mines – concurrent expansion
Underground Mines – concurrent expansion Rampura Agucha – a mine in transition Sindesar Khurd Mine – satellite lenses Zawar – integrating multiple mines Reserve & Resource : 100.0 mn MT Reserve & Resource : 122.8 mn MT Reserve & Resource : 95.2 mn MT Balaria Mines Rajpura Dariba Mine – upgrading a l
Slide 20: Project Philosophy
Project Philosophy • LOMP, Mining schemes by AMC, Australia and reviewed by Golder, Canada • Rock Mechanics & Stability Study by AMC - Beck, Australia • Central Design Center - act as a think tank for adapting best mining design / practices Robust Mine Plan • Safety - Rescue chambers, Gas Leak Detec
Slide 21: Technology & Innovation in Mines
Technology & Innovation in Mines Technology Initiatives Mine Planning Mine Operation Cavity Monitoring Measurement Best-in-class mining System: Stope scanning 3D numerical modelling equipment identifies and minimises for stope deviation and pillar design Refuge Chamber: In-situ stress Virtual realit
Slide 22: Smelters – Equipped for 1.2 mn MT
Smelters – Equipped for 1.2 mn MT Process & Technology Smelter Debottlenecking Metal Process Technology Phase 1 : December 2017 • Cell house operation @ 200 KA from 180 KA Outokumpu roast-leach-electro Hydro Metallurgy • Upgradation of Roaster leaching circuits winning technology Zinc • Mechanisatio
Slide 23: Exploration
04 Exploration Scott Caithness Head Exploration
Slide 24: Exceptional Exploration Success
Exceptional Exploration Success Sustained Commitment to Exploration → Strong Track Record of R&R Addition Mn MT 450 10 Year R&R Trend 40 • R&R 404 MT in 2017 - 34.7 35 35.2 35.3 36.1 36.1 underpins 25+ years of 34.1 34.1 400 35 production at current rate 31.5 350 30 • R&R estimation to the JORC 27.5
Slide 25: Resource-Driven Growth
Resource-Driven Growth • All deposits remain ‘open’ either at depth or along Zawar Bonanza Silver strike • New exploration targets could exist within held MLs • Zawar in-mine bonanza silver – 2-8 metres zones grading+5oz/t Ag • New prospects in all MLs Zawar Targets • Zawar has 5 new prospects • Exp
Slide 26: Exploration Technologies
Exploration Technologies Using Global Leading Exploration Technologies • Modern drill rigs and motorised directional drilling • Drilling and geochemical data management software • 3D visualisation software packages • Geophysical techniques Ore body Drill hole High speed drill rig at Sindesar Khurd 3
Slide 27: Silver
05 Silver Sunil Duggal CEO
Slide 28: Silver – Fastest Growing Portfolio of Hindustan Zinc
Silver – Fastest Growing Portfolio of Hindustan Zinc Strong Management Focus to Drive Silver Portfolio 41% growth Zn (kt) 278% growth • adding high-grade deposits • recovery efficiencies Ag 138% growth (MT) Pb (kt) E Refined metal includies captive consumption 28
Slide 29: Silver Portfolio – Growth
Silver Portfolio – Growth Global Production (MT) Ranking 2016 Global Production (MT) Ranking 2016 - Mines 1421 1241 1216 1244 908 873 790 681 659 566 436 270 1 2 3 4 5 18 1 2 3 4 5 15 Goldcorp KGHM Fresnillo Hindustan Glencore Polymetal Saucito Cannington Dukat KGHM Miedz Escobal Hindustan Zinc Zinc
Slide 30: Silver Portfolio – Realising Potential of 1,000 MT
Silver Portfolio – Realising Potential of 1,000 MT Refined Silver Key Focus Areas 470 MT (63%) 452 MT Mining Lead/Bulk (452 850) Lead Smelting • Focus on silver-rich deposits Concentrates ongoing • Achieving benchmarked recoveries in mines; • Prefloat, flash float May 18 748 MT (100%) 112 MT (
Slide 31: Way Forward
06 Way Forward Sunil Duggal, CEO
Slide 32: Way Forward
Way Forward Shaft and decline integration 1.5 mtpa Multi-level mining capacity Digital transformation under New prospects & tenements planning R&R addition 25+ years of mining R&R with potential of 1.2 1.2 mtpa mtpa capacity Transition to underground mining progressing by FY 2020 smoothly Shaft comm
Slide 33: Summary
Summary World’s second largest zinc- lead miner with 25+ year mine life Proven track Strong zinc record on fundamentals exploration success Achieve 1.2 mtpa MIC Integrated Impacting capacity by March 2020 operations & more than low cost 5,00,000 producer with lives through Commence next phase of
Slide 34: Thank You
ae vedanta transforming elements ss Thank Yu
Slide 35: Sample Financial Working & Sensitivity
Sample Financial Working & Sensitivity S. No. Particulars UOM Value Cost Sensitivity 1 Mined metal production kt 1,200 EBITDA 2 Metal production - Zinc kt 979 ($ mn) 3 - Lead kt 173 4 Silver production kt 750 Increase in LME 5 Realisation* - Zinc $/MT 2,950 6 - Lead $/MT 2,350 Zinc ($100/MT) 82 INPU
Slide 36: Rampura Agucha Mine
Rampura Agucha Mine Open Pit Ultimate Pit Depth : 400 metres from surface R&R 100.0 UG Mine mn MT • Planned Production Capacity : 4.5 mtpa • Fully mechanised trackless mining operation • Mining Method : LHS with paste fill Major Activities • Decline and ancillary development • Production shaft and c
Slide 37: Sindesar Khurd Mine
Sindesar Khurd Mine UG Mine • Planned Production Capacity : 6.0 mtpa R&R • Mining Method : Long hole stoping with 122.8 paste filling mn MT • Fully mechanised trackless mining operation Major Activities • Decline and ancillary development • Production shaft and crusher system • Raise boring • Paste
Slide 38: Rajpura Dariba Mines
Rajpura Dariba Mines UG Mine • Access to Mine : Through ramp and shaft • Method of Working : Blast hole stoping with hydraulic filling • Ore Hauling : Through ramp and shaft Main Shaft Auxiliary Shaft Major Activities • Ramp up to 1.5 mtpa ore production capacity Surface Ramp • Decline and ancillary
Slide 39: Zawar Mines
Zawar Mines UG Mine • Cluster of 4 mines having independent infrastructure R&R • Access to Mine : Through ramp and shaft 95.2 • Access to Mine : Through ramp and shaft mn MT • Method of Working : Blast hole open stoping • Ore hauling : Through ramp and shaft Major Activities Ramp up to 4.5 mtpa ore
Slide 40: Kayad Mine
Kayad Mine UG Mine • Shallow Ore Body R&R • Access to Mine : Through ramp 7.1 mn • Mining Method : Long hole open stoping with filling MT • Ore Hauling : By 50 T LPDT through ramp • Ore Treatment : By 50 T LPDT through ramp Major Activities • Decline and ancillary development • Raise boring • Cement