Corporate Presentation February 2015
HINDUSTAN ZINC Agenda
Corporate Overview
Journey over last decade
Financial Performance
Way Forward
Corporate Responsibility
Key Take Away
HINDUSTAN ZINC Agenda 2 About Us
1st Rampura Agucha Largest zinc mine globally
2nd Largest zinc-lead miner globally with: 9 million+ MT of ore production capacity
4th Largest zinc-lead smelter globally: 1 million+ MT of production capacity
(Rankings calculated from Wood Mackenzie, March 2014 Long Term Outlook)
A Journey towards Excellence - 15 million T Ore Production Capacity; & 1.2 million T MIC production capacity from Underground Mines
HINDUSTAN ZINC Corporate Overview 3 Vision, Mission & Values We want our employees to be ambassadors of our core values
To be the world’s largest and most admired zinc-lead and silver company
Enhance stakeholder value through exploration, innovation, operational excellence and sustainability Be the lowest cost producer Maintain market leadership & enhance customer Entrepreneurship Trust delight Growth Sustainability Excellence
HINDUSTAN ZINC Corporate Overview 4 Creating Injury Free Environment
Zero harm to people, host communities and Declining lost time injuries per million man-hours worked environment (LTIFR ) — Promoting behavioural safety 62% 2.29 2.15 1.95 — Safety cultural transformation journey from Reactive to Interdependent; Engagement with “Dupont” 1.01 0.88
— Focus on hazard identification and near misses
FY10 FY11 FY12 FY13 FY14 — Zero water discharge Operations + Projects
Benchmarking with peers
INITIATIVES IMPACT • Integrated Safety organisation 2.45 • Visible Change in culture 2.10 1.93 2.10 Structure • Involvement of Line • HSE Policy & Principles 0.88 0.85 Managers 0.57 0.69 • Safety Awareness monthly E • Enhanced Focus on Newsletter “Aarohan” Safety Improvement • Process Safety Management HZL
• Visible Behavior Change Vale • Contractor Safety Management in Site Leadership Rio Tinto • SOPs for high risk activities Randgold Antofagasta
• Safety Interactions Arcelor Mittal Glncore Xstrata Anglo American
Benchmarking data (LTIFR –one million man-hours basis) for FY 2013-14, Source- Annual reports HINDUSTAN ZINC Corporate Overview 5 Core Strengths Leading the way with fully integrated operations
Captive mines with Reserve & Among the lowest cost producers of zinc Resource base of 365.1 million MT ensuring mine life of 25 years 2500
2250
Integrated metal 2000 production supported by Nyrstar captive power plants 1750 Boliden MMG Limited
1500 Glencore Xstrata
1250 Low cost of operations driven by quality assets and 1000 Teck Hindustan Hindustan Zinc
multi-metal recovery C1 CashCost ($/tZn) 750
500
Market leadership in India with 250
strong presence in emerging 0 economies of Asia 0 10 20 30 40 50 60 70 80 90 100
Cumulative Production (Percentile)
Source: Wood Mackenzie Research
HINDUSTAN ZINC Corporate Overview 6 World Class Mining Assets
Reserves & Resources base of 365.1 million MT ensuring mine life of +25 years Rampura Agucha (RAM) is the largest Zinc mine in the world
Rampura Agucha Mine Sindesar Khurd Mine Reserves : 57.5mt Reserves : 20.4mt Resources : 51.9mt Resources : 78.7mt Reserve Grade Zn : 13.7% Reserve Grade Zn : 4.6% Reserve Grade Pb : 1.8% Reserve Grade Pb : 2.6% Ore Production Cap : 6.15 mtpa Ore Production Cap : 2.0 mtpa Rajpura Dariba Mine Kayad Mine Reserves : 10.0mt Resources : 44.3mt Reserves : 6.2mt Reserve Grade Zn : 6.4% Resources : 1.5mt Reserve Grade Pb : 1.6% Reserve Grade Zn : 10.4% Ore Production Cap : 0.90 mtpa Reserve Grade Pb : 1.5% Ore Production Cap : 0.35 mtpa Zawar Mining Complex Reserves : 9.9mt Resources : 68.5 mt Reserve Grade Zn : 3.8% Reserve Grade Pb : 1.9% Ore Production Cap. : 1.2 mtpa CPP : 80MW R&R Summary Tonnage Grade Mt Zn (%) Pb (%) Ag (g/t) Reserves 103.9 10.1 2.0 73.0 Resources 261.2 6.4 2.3 81.0
HINDUSTAN ZINC Corporate Overview 7 Smelting and Power Capacities
Chanderiya Lead-Zinc Smelter (CLZS) is one of the largest Zinc smelting complexes in the world.
Chanderiya Smelting Complex Zinc Smelter Debari Pyrometallurgical Lead Zinc Smelter: Hydrometallurgical Zinc 105,000 tpa Zinc Smelter: 88,000 tpa Zinc 35,000 tpa Lead Hydrometallurgical Zinc Smelter: Pantnagar & Haridwar 420,000 tpa Zinc Processing & Refining of Zinc, TM Ausmelt Lead Smelter: Lead & Silver 50,000 tpa Lead Captive Power Plant: 234MW
Dariba Smelting Complex Smelting & Power Summary Hydrometallurgical Zinc Smelter: Zinc smelting, tpa 8,23,000 210,000 tpa Zinc Lead smelting, tpa 1,85,000 Lead Smelter: Silver refining, tpa 518 100,000 tpa Lead Captive Power, MW 474 Captive Power Plant: Wind Power, MW 274 160MW Wind Power Plants by State (MW) Rajasthan 88.8 Gujarat 88.8 Wind power generation capacity of Maharashtra 25.5 around 274 MW Karnataka 49.4 Tamil Nadu 21.0 HINDUSTAN ZINC Corporate Overview 8 Journey over last decade- Mines
Capacity Expansion at Mines Reserves & Resources (mt) – 2.5X Growth 2004 RAM Debottlnecking 365 348 332 Ore Production increased from 1.35 Million 299 313 TPA to 2.35 Million TPA 272 232 210 RAM Expansion 178 223 239 261 2005 165 197 216 146 183 Ore Production increased from 2.35 Million 133 152 TPA to 3.75 Million TPA 109 92 98 89 102 97 109 110 104 2008 RAM Expansion 54 67 69 77 80 Ore Production increased from 3.75 Million TPA to 5.00 Million TPA FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 Resources Reserves Net R & R 2010 RAM Expansion Ore Production increased from 5.00 Million TPA to 6.00 Million TPA Ore Production(mt) – 3X Growth 9.3 8.6 8.0 7.5 2011 SKM Expansion 7.1 6.7 2.5 3.8 Ore Production increased to 1.5 Million TPA 5.8 1.4 2.1 2.0 4.8 5.1 1.7 3.9 1.7 2012 SKM Expansion 3.6 1.4 3.0 1.3 Ore Production increased from 1.5 Million 1.5 1.4 6.1 5.9 6.1 5.5 TPA to 2.00 Million TPA 1.3 5.0 5.1 3.5 3.7 4.1 1.8 2.2 2.5 2013 RAM UG and Kayad UG mine UG production to bridge open cast FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY14 production Ore UG Ore OC Total Ore
HINDUSTAN ZINC Journey over last decade 9 Journey over last decade- Smelters
Capacity Expansion at Smelters Mined metal (kt) – 3.0X Growth 840 830 870 880 769 735 106 110 2003 Debari & Vizag Zinc Debottle necking 88 92 86 629 84 DZS- 59 KTPA to 80 KTPA 572 532 78 VZS – 40 KTPA to 56 KTPA 67 409 60 364 CLZS debottlenecking 2004 298 54 752 739 765 770 47 651 683 Capacity – 70 KTPA to 105 KTPA 36 551 472 505 355 2005 CLZS Hydro 1 Smelter 262 317 Capacity – 170 KTPA FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 2006 Chanderiya Ausmelt Lead Smelter MIC - Lead MIC - Zinc Total MIC Capacity – 50 KTPA
Saleable Metal (KT) – 3.0X Growth 856 856 872 821 2007 Chanderiya Hydro II Smelter 0 772 5 61 Capacity – 170 KTPA 52 92 123 683 57 641 129 118 71 2008 Chanderiya & Debari Zinc DBN 554 64 156 60 Capacity – 170 to 210 KTPA (both Hydros) 442 364 161 58 337 101 DZS- 80 KTPA to 88 KTPA 301 45 712 759 749 78 55 24 677 66 25 16 552 578 2010 Dariba Zinc Smelter 33 426 349 266 318 Capacity – 210 KTPA 203 261
2011 Dariba Lead Smelter FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 Capacity – 100 KTPA Zinc Lead MIC Sale Total Silver 47 35 11 24 51 80 105 139 148 207 374 350 HINDUSTAN ZINC Journey over last decade 10 Financial Performance (in Rs billion except EPS) EBITDA Free Cash Flow * 80 80 70 70 60 60 50 50 Setting new norms of 40 40 business performance 30 30 20 20 Consistently 10 10 improving value to 0 0 stakeholders FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 34% EBITDA growth despite of LME Cash & Cash Equivalent EPS 18 growth of 7% 300 16 250 14 Experienced 200 12 management team 10 150 supporting minimal- 8 100 6 risk growth 4 50 2 0 0 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 *Before Project Capex
HINDUSTAN ZINC Financial Performance 11 Way Forward
Journey ahead Projects Resource driven growth Current Capacity, (mtpa) Capacity Addition, (mtpa)
Six major projects to increase mined 3.75 1.75 3.8
metal capacity by 20% to 1.2 mtpa 0.3 2 0.65 1.2 0.5 0.9 0.35
Total capex of $1.5 billion RAM UG Rajpura Sindesar Kayad* Zawar Bamnia Dariba Khurd Kalan
Expansion of mines in sync with Rampura Agucha Orebody increasing R&R
Present OC Proposed OC Extension of RAM OC mine life extension
Progressive commissioning from 2014
UG mining
HINDUSTAN ZINC Way Forward 12 Community Engagement
Fostering Self-Reliance through RAJASTHAN Community Development
— Reaching to more than half a million people in Rajasthan
— Positively impacting lives of more than 100,000 households in 358 Villages in Rajasthan
— Members of United Nations Global Compact (UNGC), TERI-BCSD (Business Council for Sustainable Development) and National Population Stabilization Fund
HINDUSTAN ZINC Corporate Responsibility 13 CSR Initiatives
Health & Nutrition Education Water & Sanitation
— Bal Shakti Anganwadi Project — Model School Development — Rural Safe Drinking Water Project — Centralized Kitchens for Mid-day — Vedanta Post Graduate college for — Rural Sanitation Program Meal program girls — Vedanta- Hindustan Zinc Heart — Vedanta Computer Literacy Program Hospital, Udaipur
Sustainable Livelihood (Farm Environment Conservation Women Empowerment & Non-farm)
— Improved Agriculture Program — SHG Development Program — Mega Plantation Drive — Livestock Development Program — Capacity Building Interventions — Water Conservation Drive — Vocational Trainings — Income Generation Programs — Sewage Treatment Plant at Udaipur — Women Literacy Programs HINDUSTAN ZINC Corporate Responsibility 14 Key Take Away Delivering consistent growth and value to stakeholders
Top 5 company in zinc mining and processing with 25+ year mine life Proven track record Strong zinc on exploration fundamentals success
Integrated Impacting more Operations and Low than 500,000 lives cost producer with through CSR high quality assets Experienced and committed Management Team
HINDUSTAN ZINC Key Take Away 15 Thank You