Arun Misra took over as the new CEO of Hindustan Zinc Ltd (HZL), a Vedanta Group company, from August 1, 2020. An electrical engineer graduate from IIT-Kharagpur, Arun Misra joined Hindustan Zinc on November 20, 2019, as Deputy Chief Executive Officer. He’d started his career with Tata Steel and later moved to become vice-president of the mining division.
HZL reported a 23 per cent fall in net profit at ₹1,359 crore for the quarter ended June 30, 2020. Mined and refined metal production fell 5 per cent for the quarter, due to fewer days of production in April and lower workforce availability on account of restrictions related to Covid-19. In an interview with BusinessLine , Misra shared his vision for growth and sustainability. Excerpts:
You have taken over as CEO amid difficult times. What will you focus on right now?
In the last three-four years, we at Hindustan Zinc have transformed from an open-cast mine to underground mine. And it has expanded quickly to 0.8-1.0 million tonnes of metal production in a year. Now, our next milestone is to reach 1.2 mt.
We were traditionally producing about 600-630 tonnes of silver annually. I aim to bring it up to 800 plus tonnes of silver. The cost is usually about $1,100 per tonne; we plan to bring it down to $800 plus per tonne this year. We will reach our earlier outlook of under $1,000 per tonne. Eventually, we need to reach $800 per tonne.
Will the margins increase in that case?
Yes. But it will also depend on market prices, which is not in our control as we go through the dynamic cycles of prices. This is keeping in mind, above all, maintaining zero fatality (no harm to our employees) and compliance with all environmental norms, and taking care of all the communities around our operation.
Since the company exploits natural resources, tell us what you are doing for the environment...
We have moved to 100 per cent underground mining, that is a good achievement. In open cast mines, the damage is on the surface. But in underground mining, everything is 400-500 metres below the ground. Also, we have reduced our intake from freshwater sources After mining, of all the tailings (residue of the mines) that get generated now, about 70 per cent go back to the mine for mine filling, which is a unique practice in India and not done by other mines. The tailings are mixed with cement and go back to the mine for backfilling; that supports the ground from below. The amount of damage is reduced due to the reuse of tailings.
What is the company doing for environmental sustainability?
We have substantial captive coal-based power production and to compensate that we have started solar plants up to 40Mwh capacity, and we have wind power for 275Mwh across India. We use much water for mineral processing but create reservoirs or dams and store rainwater. We have a 60mld sewage water treatment plant in Udaipur. The entire sewage of Udaipur can be treated at our facility, and this water is used for 70 per cent for our operations, and 10 per cent goes to the river. We have been declared 2.41 times water positive. We give back more water than we consume. So, through all these solar and wind, our operations can remain sustainable.
Also, over 85 per cent of our employees are local.
With global economies sinking, how do you see demand coming panning out this financial year?
Globally, outlook for this fiscal is a 5-7 per cent cut in production, and demand contraction of over 5 per cent. In India, we saw a massive contraction in April. However, in May and June, things started picking up due to the boost given by the government; these are flowing largely into construction, the steel sector is also looking up.
According to our analysis, fundamentally there’s nothing wrong in the economy despite the scare of the virus. Even as people have stopped going to office, industries are working with protection. Hence, demand will arise. The lead market is picking up. By Q2 FY21-end, we will see an increase in domestic demand.
Are you also foraying into minor minerals?
Yes, definitely. We have put up ancillary units which are producing copper sulphate which was earlier producing cadmium salts. We are going to partner more to produce cadmium, from zero sites (non-hazardous sites). We will extract zinc, lead and silver and then produce goethite which can be used for cement plants.
The extraction rates are going to improve over time. For others where no technology is available, we need to develop technology and recover.
Did you see the Covid-19 crisis coming?
We were alerted by the first set of news from Wuhan reaching India. We started certain practices like social distancing, curtailing official travel and organisation-wide preference for digital communication. At the same time, we started planning our resources.
When the government declared Janta Curfew and all the States followed suit, we were already prepared. We quickly moved to sanitation, and then operations were stopped. Since the concept of lockdown was new to India, government guidelines came in slowly. We started operating from the beginning of April 2020 with permission from the government. By May 2020, all our operations were in line.
What’s your vision on Aatmanirbhar? How is this initiative being followed at your end?
Aatmanirbhar is not only meeting the demand of a growing nation, but more importantly, to be the flag bearer of Indian quality and value proposition to the world. It is also an opportunity for getting the Indian mining industry equipped via policies and regulations to stand up to global competition.