42January 2013

Analy

sis Lead & Zinc

Industry in India :An Overview

ike all other industry sectors, the lead and zinc industry in India has L come a long way, with a

commendable performance and creditable achievements. India used to be largely import – dependent for lead

and zinc in the sixties and seventies. Today India has become a very large

producer of zinc in the global context, similarly in lead, India is a very

significant producer of recycled lead, purely from the huge domestic

generation of used lead acid batteries. The key question, to my mind, is how

much of this comes through clean, eco-friendly and energy-efficient recycling

technologies.

Resource ScenarioZinc resource wise, India is reasonably

well placed, as can be seen from the following table:

Country Reserves Reserve Base

Australia 53,000 1,00,000

China 42,000 92,000

United States 12,000 90,000

India 11,000 37,000

Kazakhstan 16,000 35,000

Canada 6,000 30,000

Mexico 15,000 25,000

Peru 23,000 23,000

Other Countries 72,000 50,000

World Total (Rounded)

2,50,000 4,80,000

WORLD ZINC RESOURCES (AS ON 2011)('000 TONNES OF CONTAINED ZINC METAL)

With regard to lead resource, as a result of significant addition of zinc-lead resources during the 11th Five Year Plan, the reserve base of India has increased from 7.0 million tonnes in 2005 to 11.00 million tonnes in 2011.

Exploration at Rampura-Agucha resulted in establishing continuity of ore body from 400m (1982) to 1.1 km depth (2010) which increased its resources from some 61 million tonnes (1982) to about 120 million tonnes (2010). The drilling also discovered

Country Reserves Reserve Base

Australia

China

United States

India

Kazakhstan

Canada

Mexico

Peru

Other Countries

World Total (Rounded)

WORLD LEAD RESOURCES (AS ON 2011)('000 TONNES OF CONTAINED LEAD METAL)

Russia

Poland

27,000

13,000

7,000

9,200

2,600

NA

1,500

650

6,000

5,600

8,000

80,000

59,000

36,000

19,000

NA

11,000

7,000

5,400

5,000

NA

NA

33,000

1,80,000

L. PUGAZHENTHY

Executive DirectorIndia Lead Zinc Development Association

44January 2013

Analy

sis

remobilized lead mineralization of about 4.0 million tonnes. With a pre-mining resource of approximately 150 million tonnes, Rampura-Agucha deposit truly makes world's giant lead-zinc deposits. At Sindesar Khurd, exploration formulation was governed from a careful study on drill cores for maker horizons & litho-structures which defined dip reversals of ore body in depth. The exploration model testing successfully increased the resources from 13 Mt (2005)

Zinc & Lead Demand & Production

Zinc demand in India has been growing steadily in the country. During the 12th Five Year Plan the zinc demand projections are as follows:

Year Demand (tonnes)

2012-13

2013-14

2014-15

2015-16

2016-17

600000

660000

730000

800000

880000

Lead demand during 2011-12 was 410,000 tonnes as per the Planning Commission, though industry estimates put the figure at much higher levels; this is because of the very large contribution coming from the lead recycling sector, whose number as well as lead imports are not precisely available. The only data that is accurately available pertains to primary lead, produced by Hindustan Zinc Ltd. India's primary lead production during the last few years was as follows:

Year

2008-09

2009-10

2010-11

2011-12

Production (tonnes)

60323

64319

67294

92098

The primary lead production capacity of Hindustan Zinc Ltd is 185,000 tonnes, commissioned recently; primary lead production will continue to grow. Zinc production during the last few years is indicated below:

YearHindustan

ZincBinani

ZincTotal

(Tonnes)

2007-08

2008-09

2009-10

2010-11

2011-12

426,323

551,724

578,411

712,471

758,717

31,903

30,443

35,352

32,662

25,368

458,226

582,167

613,763

745,133

784,085

Zinc & Lead Consumption – Indicators

Zinc consumption is largely dependent on the intensity of steel usage in any country. During 2011-12, as per the Steel Ministry, Govt. of India, the steel consumption was 71.00 million tonnes. India currently ranks 4th in world steel production, says the World Steel Association (WSA) and in a few years from now, India may become the 2nd largest steel producer.

Lead consumption is linked to automobile production in any country. India has practically all the global players in passenger cars, two wheelers, coaches, SUVs etc., operating in the country and the production volumes have been increasing steadily. During the quarter April-June 2012, India's automobile production stood at 5,208,148 units, as against 4,837,992 units during the quarter April-June 2011.

Zinc & Lead – Sectoral UsesRoughly about 77% of zinc consumed goes

into the hot dip galvanizing sector, followed by 10% in alloys, 5% in oxides, 3% in drycell batteries, 3% in zinc dust and others 2% .

With respect to Lead, 75% of lead consumed in India finds application in the lead battery sector, 20% in alloys and chemicals and the balance 5% in cables and other areas.

Lead & Zinc – MarketsTraditionally, the automotive sector has

been the major consumer of lead/lead acid batteries in India, in tune with the global practices. About 75% of lead consumed in India goes to the lead battery sector. According to the industry sources, the lead battery market size is approximately US $ 3.50 billion, with 60% being automotive batteries and 40% industrial (or stationary) batteries. There are about six large lead battery manufacturers, with a very large number in battery manufacture/reconditioning in the SME category.

The growth in the automobile sector is as follows:

VehiclesProduction(2012-13)April-Oct

Production(2011-12) April-Oct

Passenger

Two Wheelers

Three Wheelers

Comml. Vehicles

1,855,527

9,216,696

462,991

486,309

1,684,021

8,845,685

519,618

496,549

For a long time, India has been having a perennial shortage of power in different parts of India and lead-acid battery powered inverter is very common in offices, banks, schools, hospitals, hotels etc., The inverter sector

witnesses huge growths in summer months especially. Electric vehicles and renewable energy are high thrust areas of the government and once these areas expand, lead acid battery sector will make significant inroads.

New or emerging markets are as follows: Telecom sector and UPS for computers. In the telecom sector, with the advent of the mobile phones, there is always a bank of lead acid batteries, at the base of the telecom towers, to provide a continuous supply of power so that the mobile phones have the signal, non-stop. Same is the case for the computer, where there is a lead acid battery – driven UPS (Uninterrupted Power Supply) source.

Both the telecom and the computer segments are witnessing impressive growths. For instance, in the telecom sector, the teledensity in India is 70% now (ie., no of subscribers per a population of 100), with 8.0 million subscribers being added every month. The mobile companies are now focusing on smaller cities and rural areas for a greater penetration. In the case of zinc, hot dip galvanizing is the biggest outlet consuming more than 75% of the metal in the country. The established markets are power transmission lines, railway electrification towers, building and construction. Recent markets are galvanized guard rails in highways, high mast lighting columns, galvanized telecom towers and galvanized cable trays, with the latter two applications undergoing significant growths. New potential markets are galvanized steel reinforcement in RCC, conventional street light poles, galvanized railings and columns in pre-engineered building systems. The 12th Five Year Plan (2012-17) proposes a huge investment of the order of US$ 1000 billion, as against US$ 500 billion during the 11th Five Year Plan, in sectors like power, telecom, roads, ports, aviation etc., When the proposed outlays are released, steel usage in these sectors will grow manifold, thus increasing the usage of zinc/galvanizing in the process.

ConclusionA growing India, a trillion dollar economy

and a population with increased buying power and aspiring for higher standards of living, offers unlimited market opportunities for lead and zinc. The stake holders of the Indian lead and zinc industry have to setup their market development and promotional efforts.