Input cost-hit Binani Zinc considers acquiring mines

Binani Zinc has called for higher protective duty for the metal.

Faced with rising raw material costs, Binani Zinc has called for higher protective duty for the metal. The company is also planning to invest in captive mines to meet its future raw material needs.

"While the import duty on the concentrate (the raw material for zinc) is about 5 per cent, that on the metal is 10 per cent," said Sushil Bhatter, chief executive officer, Binani Zinc.

The rising cost of the raw material, he contended, affects margins "" albeit of better zinc prices. The concern comes in the wake of reports that import duty on zinc might be further reduced to 5 per cent in the upcoming budget.

The company has an annual capacity of 38,000 kilo tonne for which it needs about 74,000 kilo tonne of raw material every year. Binani had been sourcing most of its raw material needs from the mines in South America and Australia.

But of late, "due to a change in economics" sourcing the concentrate from South America is no longer viable. The company is now dependent on its Australian supplies.

To further ensure that its raw material requirements are met, Binani Zinc is looking at acquiring mines near the Gujarat-Rajasthan border and is in talks with the two state governments. The company officials remained tightlipped on further details.

Late last year, Binani Zinc undertook a de-bottlenecking process that saw belt filter replacing the installed drum filter, which helped in treating more residue.

This resulted in an increase in the production capacity from 30,000 kilo tonne to 38,000 kilo tonne. The company's zinc plant is located in Kerala's Ernakulam district.