Hindustan Zinc Unveils ₹12,000 Crore Zinc Complex in Rajasthan to Double Production Capacity

Hindustan Zinc Ltd. (HZL), a Vedanta Group company, has announced a significant capital investment of ₹12,000 crore to establish a state-of-the-art integrated zinc metal complex at Debari in Rajasthan. The announcement comes as part of its strategy to double its capacity of zinc, lead, and silver over the next few years, aligning with rising global and domestic demand.

Despite the ambitious move, the company’s shares plunged over 5% on the NSE, hitting an intraday low of ₹458.65, reflecting investor concerns about capital expenditure and short-term margins.

Project Details

According to the company’s statement, the board of directors has approved the initial plans to construct a new 250 kilotonnes per annum (ktpa) integrated smelter at Debari. This will be complemented by mines and mill expansions across existing locations.

• Location: Debari, Rajasthan

• Capacity: 250 ktpa (zinc metal)

• Capex: ₹12,000 crore

• Completion Target: 36 months

• Scope: Smelter, mines, milling infrastructure

The investment is aligned with Hindustan Zinc’s goal to meet surging metal demands in infrastructure, automobile, renewable energy, and battery manufacturing sectors.

Market Reaction

Despite the positive long-term outlook, the markets responded with caution:

• Stock Performance:

  • Declined 5.13% to a day low of ₹458.65 on NSE

  • Overall 8% down over the last five trading sessions

  • Listed among top midcap losers

Analysts cite short-term investor concerns over the project’s size, cost structure, and its impact on free cash flows during the construction phase.

Strategic Significance

• Capacity Doubling: This expansion will effectively help HZL double its metal output, strengthening its position as a global leader in zinc production.

• Domestic Sourcing: Supports India’s ambition to reduce dependence on zinc imports and promote self-sufficiency in critical minerals.

• Job Creation: The integrated complex is expected to generate substantial employment and auxiliary economic activity in Rajasthan.

• Technology Upgrade: The complex is likely to deploy modern smelting technologies, ensuring efficiency and environmental compliance.

Industry Context

Zinc demand is on the rise due to its extensive use in galvanization, alloys, and clean energy technologies. With India’s push for rapid infrastructure growth and green energy transition, the expansion puts Hindustan Zinc in a strong position to tap into future demand.

While investor sentiment remains mixed due to the heavy capex commitment, the ₹12,000 crore Debari zinc complex represents a strategic long-term play for Hindustan Zinc. The move underlines the company’s confidence in the sustained demand growth for base metals and marks a significant development in India’s mining and non-ferrous metal sector.