The board of Vedanta Resources Plc, on 4 August 2005, approved a further expansion of zinc capacity through Hindustan Zinc Ltd.

The plan costing $300 million (approx Rs.1,700 crore) would involve setting up a new 1.7 lakh tpa zinc smelter at the existing Chanderiya works of HZL in Rajasthan. A 77 MW captive power plant would also form part of the project. Construction is likely to commence in early 2006 with completion targeted for 2008. The project would be financed through internal accruals.

Following the completion of this project, HZL's total zinc capacity would stand increased to 5.7 lakh tpa. It may be recalled that in June 2005, HZL completed a project that involved construction of a 1.7 lakh tpa zinc smelter at Chanderiya along with a 154 MW (2x77 MW) captive power plant and expansion of zinc ore mining capacity of the Rampura-Agucha mines from 2.3 million tpa to 3.75 million tpa. The current zinc smelting capacity of HZL is 4 lakh tpa, with three smelters -- Chanderiya and Debari (Rajasthan) and Vizag (Andhra Pradesh.)

Separately, the board also approved the Konkola Deep Mining Project (KDMP), which will substantially increase output from the Konkola Copper Mines (KCM) in Zambia and extend the existing mine life. Copper output at the mine will be brought up from 2 million tpa to 6 million tpa. All government approvals for KDMP have been received. The project is due for completion in late 2009.

The KDMP project, costing around $400 million,  will be financed substantially from the internal cash generation of KCM, supplemented with debt as required. With other initiatives, this will take total finished copper capacity at KCM to 3.5 lakh tpa and the combined capacity of the group to over 6.5 lakh tpa, including Sterlite Industries' 3 lakh tpa copper smelter at Tuticorin.

Also See:

India's largest zinc smelter goes on stream (27-Jun-05)