Hindustan Zinc Limited (HZL), India’s largest and the world’s second-largest integrated zinc-lead producer, reported a 1% year-on-year increase in mined metal production for the first quarter (Q1) of the financial year 2025-26, demonstrating operational stability amid fluctuating global metal prices.
Key Highlights Of Q1 FY26 Operational Update
In its quarterly update released on July 3, HZL informed investors that:
- Mined metal production stood at 262,000 tonnes, marginally higher compared to 259,000 tonnes in Q1 FY25.
- The increase was driven by higher ore production across Rampura Agucha and Sindesar Khurd mines, partially offset by a lower overall mined metal grade.
- Refined metal production rose by 2% year-on-year to 263,000 tonnes, with improved smelter efficiencies ensuring near-total conversion of mined ore into metal output.
- Integrated silver production saw a 3% decline to 169 tonnes, primarily due to reduced silver grades in the Sindesar Khurd mine ore mix.
Production Performance: Mines And Smelters
| Operation | Q1 FY26 Production (tonnes) | Q1 FY25 Production (tonnes) | Change (%) |
|---|---|---|---|
| Mined Metal | 262,000 | 259,000 | +1% |
| Refined Metal | 263,000 | 258,000 | +2% |
| Integrated Silver | 169 | 174 | -3% |
Management Commentary
Commenting on the performance, Arun Misra, CEO of Hindustan Zinc, stated:
“Our Q1 performance underscores operational stability with sustained ore production across key mines. We are progressing well on our strategic projects to enhance capacity and efficiency, positioning Hindustan Zinc strongly for the remainder of FY26.”
Misra further highlighted that while global zinc prices remain volatile amid slowing Chinese demand and mixed European economic recovery, the company continues to focus on:
- Cost optimisation through process automation and digital integration
- Expansion projects including the upcoming Fumer plant for improved lead-silver recovery
- Environmental commitments towards net zero operations and water positivity
Market Context: Zinc And Lead Price Trends
During April-June 2025, global zinc prices averaged USD 2,500 per tonne, down from USD 2,620 per tonne a year ago, driven by:
- Weak demand from construction and galvanising sectors in China
- Strong inventory levels at LME warehouses
- Positive offset from reduced smelter output in Europe amid high energy costs
Lead prices remained largely stable, averaging USD 2,180 per tonne.
Strategic Projects And Future Plans
Hindustan Zinc’s strategic pipeline remains robust with focus on:
- New Fumer Plant Commissioning (FY26):
Will enhance lead and silver recovery from slag residues, improving metal realisation. - Expansion Of Mining Capacity To 1.2 MT:
Rampura Agucha, Sindesar Khurd, and Zawar mines are undergoing phased ore production ramp-ups. - Digital Mine Transformation:
Deployment of automated drilling, real-time ore body mapping, and smart ventilation for cost efficiency and worker safety. - Sustainability Commitments:
- Net Zero by 2050: Targeting complete transition to renewable energy.
- Water Positive by 2030: Expanding recycled water usage across mining and smelting operations.
Financial Expectations And Analyst Views
Analysts tracking Vedanta Group’s mining operations expect:
- Stable EBITDA margins despite zinc price headwinds, supported by cost savings and rupee depreciation benefits.
- Strong dividend payouts as Hindustan Zinc continues to be a cash cow for Vedanta Ltd, aiding group deleveraging efforts.
- Potential impact from royalty rate changes if proposed mineral taxation amendments are passed in Parliament during FY26.
Global Zinc Market Outlook
According to International Lead and Zinc Study Group (ILZSG):
- The global zinc market is projected to remain in slight surplus in CY25, with mine production growth in China, India, and Peru outpacing demand recovery.
- However, the medium-term outlook remains balanced, driven by infrastructure spending and renewable energy sector galvanisation demand.
Company Profile: Hindustan Zinc
- Ownership: 64.9% owned by Vedanta Ltd; 29.5% by Government of India
- Operations:
- 5 underground mines
- 3 smelting complexes
- Integrated power plants for captive use
- Products: Zinc ingots, lead ingots, and silver bars
The company contributes significantly to India’s non-ferrous metals sector, supplying raw materials for galvanising, automotive, renewable energy, and defence applications.
Stock Market Performance
On the National Stock Exchange, Hindustan Zinc shares closed flat at ₹345 on July 3, reflecting investor caution due to muted global metal sentiment despite the operational update. Analysts remain bullish on long-term prospects given stable production growth and consistent dividend payouts.
Future Challenges And Opportunities
Key challenges:
- Global metal price volatility impacting revenue realisation
- Stringent environmental regulations requiring faster ESG adaptation
Key opportunities:
- Growing demand from infrastructure, railways, and renewables under India’s decarbonisation and urbanisation push
- Technological advancements for improved ore-to-metal recovery and cost efficiency
Conclusion
Hindustan Zinc’s marginal increase in mined metal production in Q1 FY26 reaffirms its status as a stable producer with disciplined operations. As it progresses with strategic expansions and sustainability initiatives, the company remains a key player driving India’s self-reliance in critical non-ferrous metals while maintaining competitive returns for its stakeholders.
Disclaimer: This news content is based on official company updates, market analysis, and expert commentary. It is intended for informational purposes only and does not constitute financial investment advice. Readers are advised to consult their financial advisors before making investment decisions.
