Hindustan Zinc Ltd is a very interesting Indian success story.
From a small, but profitable PSU, privatised by the Vajpayee government, it has grown under Anil Agarwal to one of the largest producers of zinc in the world. This has been achieved by steadily ramping up production from the extraordinarily rich zinc mine it has in Rajasthan, which is the largest zinc mine in the world. It also has a very high zinc content in the ore mined.
His very able daughter Priya has taken over as chairperson since January 2023. She recognises that she has been handed a jewel. But while soft-spoken, she too is ambitious like her father and wants to double the size of the company. She has strong professional leadership that believes this can be done.
In many ways, Hindustan Zinc, exemplifies what Anil Agarwal has long been saying. If the government significantly liberalises the exploration and mining sector, given all the unexplored potential of the country, there is no reason why India should not be self-sufficient, well before 2047, in minerals and even rare earths!
Hindustan Zinc is also a good example of the ambivalent attitude of all governments, UPA or NDA, of not really wanting to let go of control. Though the government had promised full divestment, it has never happened. With a rising share price due to the Agarwal management, the government, ably supported by the endless red tape generated by bureaucrats, kept putting off the divestment. What is worse, with their eyes on the profits generated, and the accumulating reserves, the government repeatedly stalled the merger of Hindustan Zinc into Vedanta Ltd, thus frustrating Agarwal’s ambition of creating an integrated Indian mining company, along the lines of global mining majors like BHP and Rio Tinto: instead he has been virtually pushed into the second best alternative of breaking up Vedanta into different verticals, each focussing on different minerals.
Yet to his credit, Agarwal has taken all this in his stride – smiling all along. He has refused to criticise or seriously quarrel with the government, nor has he entered into endless litigation with the government. He accepts the situation as it is and then focuses on getting on and growing his business.
As India grows rapidly, the consumption of minerals and metals will grow multifold. It is high time that we become self-reliant in this crucial sector. How long can we continue to be one of the largest producers of bauxite, yet import aluminium and finished products like aluminium sheets for beverage cans!
Like under her father earlier, companies like Hindustan Zinc will play a crucial role, if encouraged by the government, in the Atmanirbharat story.