Hindustan Zinc weighs expansion

Bloomberg

Hindustan Zinc, a unit of billionaire Anil Agarwal’s Vedanta, is considering expanding overseas as a way to profit from growth opportunities in Europe.
“There is a strategic thought that we could venture into the international market,” Hindustan Zinc Chief Executive Officer Arun Misra said in a phone interview. “Europe provides us with an opportunity, the make or break factor is the freight.”
That expansion could potentially involve international zinc assets held by the company’s parent Vedanta, said Misra, adding that minimising soaring freight costs would be key to such growth. Vedanta’s international business owns zinc assets in Namibia and South Africa.
Mining executives, investors and government ministers are meeting in drought-hit Cape Town for the African Mining Indaba, the continent’s biggest gathering of one of its most vital industries.
The decline in zinc since mid-April has pushed the Mumbai-listed miner to re-evaluate its move to lock in prices for some of its output. While Hindustan Zinc sold forward 18% of this year’s production at about $4,200 a ton, that hedging is no longer as rewarding now that prices have dropped, interim Chief Financial Officer Sandeep Modi said on the same call.
Demand in the company’s home market of India remains robust as the government’s infrastructure push is likely to drive demand for zinc to build galvanised rail lines and power transmission infrastructure, Misra said.
The CEO forecast demand growth of more than 3%.
Hindustan Zinc reported a 56% jump in net income in the quarter through June from a year earlier.