Positioned to lead and embrace expanding opportunities

GLOBAL MACROECONOMIC OVERVIEW

The global economy in 2025 is navigating through a phase of significant uncertainty, shaped by major policy shifts and evolving trade dynamics. The announcement of multiple waves of tariffs by the United States against key trading partners in February 2025 have triggered counter measures and reignited volatility across global markets, testing economic resilience globally. The International Monetary Fund’s (IMF’s) April 2025 World Economic Outlook projects global GDP to grow 2.8% in 2025.

INDIAN ECONOMIC UPDATE

Amidst this challenging backdrop, India is projected to be a standout performer, with a forecasted GDP growth rate of 6.5% in 2025 and 2026, maintaining a solid lead over the rest of the world. According to the CRISIL India Outlook report, India’s macroeconomic growth showed remarkable resilience in FY2025, with growth normalising to pre-pandemic levels at 6.5%. In FY2026, growth is likely to be supported by easing monetary policy, government measures to boost private consumption, and the budgeted 10.1% increase in government capital expenditure.

The Purchasing Managers’ Index (PMI) further corroborates India’s economic resilience as it continues to maintain a leading position among major global economies in PMI rankings.

METALS SECTOR OUTLOOK & IMPACT

India’s metals and mining industry is outperforming global trends, showing strong resilience amid stagnant commodity volumes worldwide. The sector is being driven by increased volumes, better margins, and firm prices, along with tight cost control across operations.

In FY2025, India's domestic steel demand showed strong uptake, growing 7% year-on-year from FY2024 levels. This momentum is expected to build further into 2025, fuelled by rising public investment in infrastructure and development programmes. Aligned with the growing demand, the domestic steel capacity is projected to steadily expand to 300 million tonnes by 2030. This, in turn, could drive the demand for zinc for galvanisation of steel. Overall, the combination of strong fundamentals, policy support, and improving global sentiment positions India's metals and mining industry as a standout in an otherwise subdued global commodities landscape.

On the international front, improving conditions in the US and China could uplift global commodity pricing. In the US, policy measures such as tax cuts, softer interest rates, and investment in heavy industries are expected to stimulate demand. China, meanwhile, is seeing a revival in demand supported by accommodative fiscal and monetary steps.

In the larger trend, the global push towards energy transition is driving robust demand for a variety of critical minerals essential to clean energy technologies. Metals like copper, aluminium, lithium, nickel, cobalt, graphite, and rare earth elements are witnessing growing demand due to their application in electric vehicles (EVs), batteries, wind turbines, solar panels, and grid infrastructure. Zinc plays a vital role in scaling these technologies of the future as it is essential for galvanising steel, supporting clean energy infrastructure like solar and wind, and enabling the manufacturing of EVs.

As per Wood Mackenzie, zinc will play a vital role in the energy transition. The need for long service lives and low maintenance costs means that zinc's primary role in the energy transition will be its traditional one, i.e., providing corrosion protection for the steel used in renewable energy infrastructure. Similarly, Silver is no longer merely a precious metal – it has become a strategic resource vital to a low-carbon, high-tech future. It plays a critical role in advanced semiconductors, electronics, and 5G infrastructure, and is enabling innovations in solar technology.

Furthermore, as major economies like the US, the European Union, Japan, and Australia seek to reduce their dependence on China for critical mineral supplies, India's expanding manufacturing base and mineral potential make it an increasingly attractive alternative for global supply chain partnerships.

In this context, India is accelerating its efforts to secure critical mineral resources. The Geological Survey of India (GSI) has intensified exploration activities, targeting potential mineral-rich regions. For the 2024-25 field season, GSI undertook 195 exploration projects, including 35 in Rajasthan, as part of a broader goal of 1,200 exploration projects by 2030-31. This aligns with Hindustan Zinc's strategic objective to expand mineral discoveries nationwide to unlock long-term growth opportunities.

HINDUSTAN ZINC’S STRATEGIC POSITIONING

In FY2025, Hindustan Zinc held a c.77% market share in India's primary zinc sector and its mined metal production reached 1,095 kt while its refined metal production reached 1,052 kt. As a key milestone in our long-term target of achieving 2x metal capacity and 1,500 TPA of silver refining capacity by 2030, our Board approved a major expansion project in June 2025 to enhance our integrated refined metal capacity by 250 ktpa. This will take the overall metal capacity to 1,379 ktpa, while mining capacity will increase to 1,510 ktpa to align with smelting capabilities. This initiative, involving an investment of c.₹ 12,000 crore, marks a bold step towards realising our 2030 vision. This strategic expansion will strengthen Hindustan Zinc's positioning as a key metal player, leveraging new growth opportunities arising from increased domestic galvanisation demand and global energy transition trends.

With global demand for silver steadily increasing and supply remaining in deficit for the fifth consecutive year, Hindustan Zinc continues to hold a unique position as India's sole primary silver producer and among the top five globally. We cemented our position as one of the lowest-cost producers in the world by lowering the zinc cost of production by 6% to US$ 1,052 per tonne in FY2025. The goal is to bring this further down to US$ 1,000 per tonne to strengthen our position as a global cost leader.

Hindustan Zinc's growth strategy is firmly anchored in diversification. In the past year, we commissioned a 30 ktpa zinc alloy plant, marking a major step in expanding our value-added products (VAP) portfolio. With the inclusion of alloys, VAP now represents c.22% of our overall business. We are also making a foray into the fertiliser sector, with a DAP/NPK plant, slated to operationalise by FY2027. These efforts are set to broaden revenue sources and improve margin performance.

In line with the macroeconomic and sectoral trends, Hindustan Zinc is strategically diversifying portfolio beyond its core base metals of zinc, lead, and silver. In FY2024, we have established a new subsidiary, Hindmetal Exploration Services Pvt. Ltd., to focus on critical mineral exploration. As part of our portfolio expansion focus, we won a Tungsten block at Andhra Pradesh, a Potash block at Rajasthan, and a Rare Earth Elements block at Uttar Pradesh.

In the face of global economic uncertainties, Hindustan Zinc remains well-positioned to leverage India's robust economic growth and infrastructure development. Our focus on cost optimisation, operational efficiency, and value-added products will ensure resilience against commodity price volatility.

By capitalising on domestic market opportunities and maintaining a strong balance sheet, Hindustan Zinc is poised to navigate the challenges of 2025 and beyond, delivering value to stakeholders and contributing to India's economic progress.