EV Is The Way Forward In Mining: Hindustan Zinc CEO On $1-Billion Green Transition

Hindustan Zinc Ltd. has started the process of a $1-billion green transition to replace fossil fuel-based underground vehicles in mines over the next five years, Chief Executive Officer Arun Misra said.

Two underground electric vehicles introduced so far are auxiliary equipment, while the four that will come this year will be production equipment, Misra told BQ Prime in an interview.

Every year, the company spends around $200–250 million to replace old mining vehicles and equipment. Therefore, wherever the technology will support, HZL will replace the underground vehicles with EV over the next five years, he said.

The replacement makes sense not just from the perspective of a green climate, but also from a business aspect as it helps in reducing the maintenance cost as well, according to the whole-time director.

Misra said green hydrogen as a fuel was still some distance away before being used commercially.

"I am open to a scheme where hydrogen is produced from renewable power, which is then distributed and utilised in the vehicles," Misra said. "But there is no point if they are produced from thermal plant(s)."

The company can also look at setting up the hydrogen manufacturing plant at the site since HZL is used to the process of electrolysis for production of zinc. The only challenge is the furnaces will have to be upgraded to use hydrogen.

HZL is waiting for that technology to come. "If the hydrogen infrastructure for generation, distribution and utilisation in vehicles happens before, we will use them in vehicles," he said. "Till then, EV is the way forward."

The company started work on the 0.5 million-tonne-per-annum-capacity fertiliser plant in January.

The sulphuric acid, which is a by-product of zinc production, was earlier transported to fertiliser companies in the neighbouring districts. That involved huge safety risks. Hence, the company decided to set up a fertiliser plant to consume the acid as a raw material.

India consumes around 60 MT of fertiliser, out of which 30 MTPA is urea and the remainder is phosphatic fertiliser. Of the phosphates, 10% is imported.

"Our lookout is on the phosphatic side," Misra said. "We will produce 0.5 MTPA of the phosphatic fertiliser that can be scaled up to 1 MTPA later."

The belt that the company will cater to will be from Gujarat, Rajasthan, western Madhya Pradesh, western Uttar Pradesh and Haryana, Misra said.

The zinc producer expects to start commercial production from the fertiliser plant in the next 18 months—around July–August 2024—with an investment of Rs 2,200 crore.

Since the Union government's opposition to the proposed $2.98-billion acquisition of THL Zinc Ltd., the company is in consultation with each shareholder to get their approval for the acquisition, Misra said.

"We have to have the approval of the majority of (the) minority," Misra said. "Once we feel the consultation process is over, we will go for the shareholders' approval."

The board of HZL had approved on Jan. 19 the acquisition of Vedanta's International's zinc subsidiary for $2.98 billion through a wholly-owned subsidiary in tranches. However, the Indian government, which owns a 30% in the company after the divestment that happened in 2002, opposed the deal and asked the company to look at cashless alternatives for the acquisition.

On the government's demand, Misra said it is a part of the consultation process and nothing can be said till the time it is over.