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Hindustan Zinc to close four unviable units

India's largest zinc and lead maker, Hindustan Zinc Ltd, will close three mines and a lead smelter because they are unviable, the company's chairman said on Tuesday.

"We have already started the process by offering a special retirement scheme to employees of our Sargipali mine," K V K Seshavataram said from Udaipur.

The lead mine in Orissa was estimated to contain 1.94 million tonnes of ore reserves in January.

The mine's 503 employees have till July 15 to opt for the voluntary scheme, which is meant to induce workers to quit by giving them a one-time payment.

Hindustan Zinc will later start the process of closing the other two mines -- a lead mine at Agnigundala in the southern state of Andhra Pradesh and a rock phosphate mine at Maton in Rajasthan.

"The ore reserves at the Maton mine have been practically exhausted while the production cost at the mine in Agnigundala is very high," the firm's chief said.

The mine at Agnigundala has reserves of 1.59 million tonnes and 246 workers, while the rock phosphate mine has reserves of 3.94 million tonnes and 224 employees.

Stake sale

A lead smelter with an annual capacity of 8,000 tonnes located at Tundoo in Bihar will also be closed, Seshavataram said.

"The smelter has very old technology, and modernisation is neither possible nor viable," he said.

Besides this, the plant did not have space for dumping lead waste, he said.

This is the second smelter the firm will be closing. In August 1999, it closed its 22,000 tonnes per annum capacity lead smelter at Visakhapatnam in Andhra Pradesh due to problems tied to pollution.

In December 2000, the government, which owns 75.92 per cent of HZL, invited proposals from strategic partners to buy a 26 per cent stake as part of its decade-old drive to privatise state-run companies.

HZL has five lead-zinc mines with a combined annual capacity of 3.49 million tonnes and four lead-zinc smelters, with a combined annual zinc capacity of 169,000 tonnes and lead capacity of 65,000 tonnes.

Seshavataram said the privatisation process was being undertaken by the Union government and the firm itself had no role to play at present.

A HZL official had earlier said that Indian firms Bhushan Steel and Strips, Sterlite Industries, Binani Industries and Indo-Gulf Fertilisers had shown an interest in buying a stake.

Korea Zinc, London-based Allied Deals and Switzerland-based commodities group Glencore and Britain-based Metdist had also shown interest, he said.

The first phase of due diligence -- a process in which bidders inspect a firm's financial records and operations -- had been completed by end-April and the second phase by June 30.

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