1 week Ago By Moneycontrol
Mining major Hindustan Zinc expects to further lower its cost of production by $25-30 per tonne as coal prices continue to soften, offering some cushion against a volatile global pricing environment, Chief Financial Officer Sandeep Modi told analysts during the post-earnings briefing on April 25. The world's largest integrated zinc producer remains bullish on international prices going ahead, expecting them to be around $2,800-2,900 per tonne during FY26. Zinc prices have fallen 10.
5 per cent in the past one year, partly under pressure due to a combination of rising supplies and weak demand. The metal is heavy used in the construction sector, which is facing a global slowdown, along with broader uncertainty over due to US tariff policies, which have together dampened sentiment. Asked if ongoing cost-saving measures could offset the negative impact of lower LME prices, Hindustan Zinc said a major portion of its fixed costs are one-time in nature, while its variable costs - linked to commodities like coal, met coke, and diesel - are starting to ease, creating room for further cost efficiencies.
Sandeep Modi said Hindustan Zinc is already benefitting from a fall in coal prices, although the full benefits of lower diesel prices are yet to be realized. Hind Zinc expects its cost of production to stay around $1,025-1,050 per tonne during FY26. Efficiencies are further expected to be enhanced as the share of renewable power usage rises, projected to grow to 30–35% of total consumption compared to 13% in FY25, along with better production volumes.
Despite the turbulence in global prices, Hindustan Zinc achieved a 16-quarter low in the cost of production, at $994 per tonne during Q4FY25, and a four-year low of $1,052 per tonne on the full-year cost. For the quarter, revenue from zinc business rose 20 per cent to Rs 7,118 crore. Benefitting from its cost savings measures, the miner saw the March-quarter net profit rise 47 per cent YOY to Rs 3,003 crore, it reported on April 25.
The company's revenue from operations meanwhile surged over 20 percent year-on-year to Rs 9,087 crore, its highest ever Q4 revenue. The Vedanta group company plans to foray into potash mining and is eyeing a block in Rajasthan which has a fair chance of having lithium reserves also, according to news reports..
