How Hindustan Zinc Turned a Zinc Mine Into a ₹40,844 Crore Multi-Metal Business

Hindustan Zinc may carry zinc in its name, but the company makes money from a much broader set of metals. The same mining system that produces zinc and lead also allows it to recover silver, while its own smelters, power infrastructure and processing facilities help it capture more value before the finished metals are sold.

That integrated model has created one of India's largest mining businesses. In FY26, Hindustan Zinc reported ₹40,844 crore of revenue from operations, while EBITDA reached about ₹22,162 crore and net profit rose to roughly ₹13,832 crore.

Zinc remains the largest product by volume, but it is no longer the whole story. Silver has become an especially important profit driver, while lead, by-products and cost efficiencies across the mining and smelting system add further value.

The business therefore works less like a single-metal company and more like a platform built around one mineral resource base that can be monetised in several ways.

Zinc still gives Hindustan Zinc its scale

Zinc remains the foundation of Hindustan Zinc's business.

The company produced about 851,000 tonnes of refined zinc in FY26, making it by far the largest metal in the portfolio by volume. Around 600,000 tonnes were sold in the domestic market, while approximately 251,000 tonnes were exported.

Zinc is mainly used to protect steel from corrosion through a process known as galvanisation. That connects demand to industries such as infrastructure, automobiles, construction, power transmission, railways and renewable energy.

For Hindustan Zinc, revenue from the metal depends on both production volumes and realised prices.

The company can control how much ore it mines, how efficiently it processes that ore and how much refined metal its smelters produce, but zinc prices are influenced by global commodity markets.

This means annual revenue can rise even when production does not change significantly if zinc prices improve. The opposite is also true, which makes cost efficiency extremely important during weaker commodity cycles.

Silver has become the surprise profit engine

The most unusual part of Hindustan Zinc's business is silver.

The company does not operate like a conventional primary silver miner. Silver occurs alongside zinc and lead in its mineral deposits and is recovered during the processing and refining of those ores.

This allows Hindustan Zinc to create another valuable product from a mining system that already exists to produce zinc and lead.

In FY26, the company produced around 627 tonnes of silver. Production was lower than the previous year, but strong silver prices made the metal extremely valuable financially.

Silver generated approximately ₹9,841 crore of segment revenue in FY26 and contributed around 45% of Hindustan Zinc's overall profitability.

That makes silver disproportionately important.

Zinc may dominate production tonnage, but a relatively smaller quantity of silver can contribute a very large share of profits because of its much higher value per unit and the economics of recovering it alongside other metals.

The result is a business where movements in the silver price can materially change earnings even when zinc production remains fairly stable.

One ore body can produce several revenue streams

The multi-metal nature of Hindustan Zinc's mines is central to the business model.

Ore extracted from the company's mines contains varying quantities of zinc, lead and silver. Once this ore reaches the processing plants, the valuable minerals are separated and eventually refined into saleable products.

That means Hindustan Zinc does not have to create an entirely separate mining system for every metal it sells.

The mine, shafts, equipment, workforce and much of the processing infrastructure already exist.

Recovering several commercial metals from the same ore can therefore improve the total value produced from each tonne of material extracted.

This is why the company's economics cannot be understood by looking at zinc prices alone. The mix of metals inside the ore matters almost as much as the amount of ore being mined.

A period with stronger silver grades, for example, can produce very different economics from one where the mined material contains less silver.

Lead provides another layer of revenue

Lead is smaller than zinc by volume but remains a meaningful part of the business.

Hindustan Zinc produced roughly 197,000 tonnes of refined lead in FY26. Around 151,000 tonnes were sold domestically, while approximately 46,000 tonnes were exported.

Lead is used heavily in lead-acid batteries, particularly in automobiles and industrial applications, and also has uses in electrical equipment, construction and defence.

For Hindustan Zinc, lead adds another source of revenue from the same broader mineral system.

Its contribution is much smaller than zinc and currently far less important to profitability than silver, but it helps improve the economics of the ore being extracted.

The more valuable products Hindustan Zinc can recover from each tonne of mined material, the more effectively it can spread the cost of mining and processing.

Hindustan Zinc controls most of the value chain

One of the company's biggest structural advantages is vertical integration.

Hindustan Zinc operates mines including Rampura Agucha, Sindesar Khurd, Rajpura Dariba, Zawar and Kayad, while also running concentrators, smelters and refining facilities.

Instead of mining ore and selling concentrate to another company, Hindustan Zinc carries the material much further through the value chain.

Ore is extracted from the mine, processed into concentrate, moved to smelters and eventually converted into refined zinc, lead and silver that can be sold to customers.

This allows the company to capture more of the value between the underground mineral and the final metal.

It also gives Hindustan Zinc greater control over production planning, recovery rates and operating costs.

The trade-off is that the business becomes highly capital intensive because mines, processing plants, smelters and power infrastructure all require substantial investment.

Low production costs protect the business when metal prices fall

A mining company has limited influence over global commodity prices, which makes the cost of producing each tonne extremely important.

Hindustan Zinc's zinc cost of production excluding royalty fell to around $959 per tonne in FY26, its lowest level in five years.

Lower costs improve profitability directly, but they also make the business more resilient.

If zinc prices decline, a high-cost producer can quickly see its margins disappear. A lower-cost producer has more room before the market price approaches the cost of producing the metal.

Hindustan Zinc benefited in FY26 from factors including improved mine grades, greater use of domestic coal, softer imported coal prices and increasing renewable-energy usage.

Higher realisations from by-products also help.

When silver and other secondary products generate more revenue, they effectively improve the economics of the entire mining operation rather than existing as completely independent businesses.

Power generation helps control one of the biggest costs

Mining and metal smelting consume large amounts of electricity.

Smelters in particular need a reliable supply of power because the refining process cannot simply stop whenever grid electricity becomes expensive or unavailable.

Hindustan Zinc has therefore built its own energy infrastructure, including captive thermal power plants, wind assets, solar capacity and waste-heat recovery systems.

In FY26, the company generated around 4,114 million units of thermal power and 892 million units of green power, while renewable power accounted for an increasing share of its overall electricity requirement.

Power generation is not one of Hindustan Zinc's main external revenue streams. Its value lies primarily in controlling production costs and improving the reliability of the mining and smelting system.

This becomes particularly important during periods when external electricity or coal prices rise sharply.

A more stable energy cost allows Hindustan Zinc to protect margins even when commodity prices are outside its control.

Mine grades can change the economics significantly

Not every tonne of ore is equally valuable.

Different mines, and even different sections within the same mine, contain different concentrations of zinc, lead and silver.

Rampura Agucha is known for strong zinc grades, while Sindesar Khurd is especially important for silver.

Higher grades mean the company can recover more valuable metal from the same amount of material.

This can reduce the effective cost of production because Hindustan Zinc does not need to mine, move and process as much rock to obtain the same quantity of finished metal.

Mining sequence therefore matters.

If the company spends more time extracting ore from areas with lower silver content during a particular year, silver production can decline even if overall mining activity remains strong.

This was one factor behind lower silver output in FY26.

For investors looking only at tonnes of ore mined, that distinction can be easy to miss. The quality and metal content of that ore can matter just as much as the quantity.

By-products add more value to the processing system

Silver is the most financially important by-product, but Hindustan Zinc also produces other materials during smelting and refining.

Products such as sulphuric acid can emerge from the processing system and either be sold or used within operations.

These additional products matter because the company has already incurred much of the cost required to mine and process the original ore.

Recovering something commercially valuable from material that might otherwise have little value can improve the total economics of the system.

At Hindustan Zinc's scale, even relatively small improvements in recovery rates can have a meaningful impact.

This creates a constant incentive to improve processing technology and extract more value from the same raw material.

Commodity prices can move profits quickly

Hindustan Zinc's FY26 results show how powerful commodity prices can be.

Revenue increased 20%, while EBITDA rose 27% and net profit increased 34%. Higher zinc and silver prices were major contributors, alongside lower production costs and favourable currency movements.

The effect became even more visible in Q1 FY27.

Revenue rose to around ₹13,747 crore, while net profit jumped to approximately ₹5,469 crore. Silver revenue alone increased sharply as prices moved higher.

This illustrates the operating leverage inside a mining company.

Once the mines, workforce and smelters are already operating, a higher selling price does not necessarily require an equivalent increase in cost.

A significant portion of that additional realisation can therefore flow through to profit.

The same leverage works in the opposite direction during a commodity downturn, which is why earnings at mining companies can be much more volatile than production volumes suggest.

Silver can matter more to profit than its revenue share suggests

The difference between revenue contribution and profit contribution is one of the most important parts of Hindustan Zinc's business.

Silver accounted for roughly a quarter of segment revenue in FY26, but management said it contributed around 45% of overall profitability.

This happens partly because silver is recovered as part of a wider zinc-lead mining process.

A large portion of the mining infrastructure and operating cost would exist even without the silver revenue.

Once silver is recovered and refined, strong prices can therefore create a particularly valuable contribution to earnings.

This makes silver almost like a hidden profit engine inside a company whose identity is still dominated by zinc.

It also means Hindustan Zinc's earnings can increasingly be influenced by precious-metal markets, not only industrial metals.

Hindustan Zinc is preparing to almost double capacity

The company is now moving towards a much larger expansion phase.

Under its HZL 2.0 strategy, Hindustan Zinc aims to increase refined metal capacity from roughly 1.1 million tonnes annually to 2 million tonnes.

Silver refining capacity is also targeted to increase from around 800 tonnes to approximately 1,500 tonnes per year.

The broader expansion programme could require ₹40,000 crore to ₹50,000 crore of investment over about five years.

Projects include additional mining capacity, concentrators, smelting infrastructure and a new integrated zinc smelter at Debari.

If these projects are completed successfully, Hindustan Zinc would be able to sell significantly more metal without changing the basic business model.

The opportunity comes from scaling a system that already produces zinc, lead and silver at relatively low cost.

Old mining waste could become another source of metal

One of Hindustan Zinc's more interesting expansion projects involves tailings.

Tailings are the materials left behind after ore has already gone through a processing plant. Older processing technology often failed to recover every economically valuable mineral from this material.

Hindustan Zinc is developing a tailings-reprocessing project at Rampura Agucha to recover additional metal from previously processed material.

This creates the possibility of generating value from ore that was mined years ago.

The company does not have to extract that material from deep underground again because it is already sitting at the surface as mining waste.

Reprocessing still requires investment and operating costs, but successful recovery can effectively extend the value of an existing mine.

This is another example of the same principle that drives the wider business: extracting more saleable metal from resources and infrastructure Hindustan Zinc already controls.

The resource base gives the business a long runway

Expansion would have limited value without enough mineral resources to support it.

As of March 2026, Hindustan Zinc reported about 468.6 million tonnes of reserves and resources.

Within that base, the company reported substantial contained zinc, lead and silver, supporting a long operating life across its mines.

This allows management to plan large capacity investments with greater confidence that enough underground resources exist to supply them.

However, doubling production also means resources will be consumed more quickly.

Exploration therefore remains an important part of the business.

Hindustan Zinc needs to continue identifying new mineralisation and converting resources into mineable reserves if it wants to maintain a long production runway while increasing annual output.

What really matters

Hindustan Zinc's ₹40,844 crore business is built on extracting more value from each tonne of ore rather than depending on zinc alone.

Zinc provides the scale. Lead creates another commercial product, while silver has become an unusually powerful contributor to profits. Other by-products, captive power, low production costs and integrated smelting infrastructure further improve the economics.

Silver is particularly important because it demonstrates why Hindustan Zinc should be viewed as a multi-metal miner rather than simply a zinc company. In FY26, silver represented a much smaller share of revenue than zinc and lead combined, yet it contributed around 45% of overall profitability.

The next phase is about scaling this system.

Hindustan Zinc plans to almost double refined-metal capacity while also increasing silver output, expanding mines and extracting additional value from old tailings.

The company's results will still move with global metal prices, which remains an unavoidable part of commodity mining. But its ability to produce several metals from the same resource base, while keeping zinc production costs relatively low, gives it a stronger economic foundation than a single-metal miner.

The name may still say Hindustan Zinc, but an increasingly large part of the profit story is being written by silver and the wider multi-metal system built around the company's mines.