The country’s second largest zinc producer, Binani Zinc Ltd (BZL), a Rs 300 crore Braj Binani Group enterprise, is planning to almost treble zinc production capacity to capitalise rising metal’s consumption in infrastructure.
Under the proposed plan, the company has decided to ramp up smelter capacity from the existing 38,000 tonnes in Binanipuram at Kerala to 50,000 tonnes. It also proposes to set up a greenfield smelter with a capacity of 50,000 tonnes in Rajasthan where it is in the process of strengthening backward integration projects.
Since, BZL operates zinc smelter in Kerala with 100 per cent imported raw material, the cost of production was very high compared to the country’s largest zinc producer Hindustan Zinc Ltd (HZL), a Vedanta Group company who owns mines in the heart of Udaipur, Rajasthan.
Uncertainty in zinc concentrate market, availability constraints and above all, dollar-rupee fluctuations were affecting the company’s margins badly. BZL imports zinc concentrates, the raw material for zinc manufacturing, from Australia and Brazil.
“Therefore, we decided to have our own mines for which we set up a joint venture RBG Minerals Industries in association with Rajasthan State Mines & Minerals Ltd (RSMML - a government of Rajasthan undertaking) and Gujarat Mineral Development Corporation (GMDC - a government of Gujarat undertaking),” said Vinod Juneja, managing director of Binani Group of Industries. RSMML and GMDC hold 25 per cent and 10 per cent in the Rs 5 crore joint venture while BZL holds the remaining 65 per cent.
When asked about the investment the company has proposed to chalk out, Juneja said, “Since, the project is in exploration stage, any firm conclusion on figures would be premature. However, we are open to any investment to be worked out.”
Braj Binani, chairman of Binani Industries, however, had earlier said that the private equity fund would invest close to Rs 150 crore as a mix of debt and equity in the project. The investor will get some stake in BZL in lieu of its investment in mining business, but the extent of its holding will be decided after the valuation is finalised shortly.
“The mine located at states boarder spread from Ambamata in Gujarat to Deri in Rajasthan, the involvement of two state governments will give impetus to the project and therefore, I am confident that the project would start mining shortly,” said Juneja.
In order to raise efficiency and productivity, BZL is streamlining and clearing the bottlenecks in the systems and processes while working towards better, environment-friendly waste disposal systems.
The project is in final stage of commencing operation while BZL is planning to start commercial operation with expanded capacity on both greenfield and brownfield projects by 2011.
