In a free-wheeling chat with Benedict Paramanand, Editor of SustainabilityNext, Mr. Arun Misra, CEO of Hindustan Zinc, passionately shares his vision and plans on how he is shaping his company to be a leader in sustainable mining. Watch the SN Leader Conversation here
You have worked with Tata Steel for a long time, what kind of values were you able to bring into Hindustan Zinc?
I had spent about 30-31 years in Tata Steel. Tata Steel is more than a 100-year-old organization, whereas Vedanta is only 25 years old. Hindustan Zinc, part of the Vedanta group, is a first-generation company. It’s a rags-to-riches story. But despite its young age, Vedanta has become a multibillion-dollar enterprise. It is into aluminum, zinc, iron, iron ores, steel, and other minerals.
Unlike the Tatas, Vedanta works on newer business models. It has been a great learning for me here. Here, almost all operations are outsourced. The entire tone and tenor of HR and finance are different. The organization’s risk-taking ability is very high. Our Chairman, Mr. Anil Agarwal’s stated policy is – even if something is 60% correct (doable), you go ahead and do it.
It must have been quite an interesting transition for you
Yes, in Tata Steel also, I was known as somebody who would take risks, and I was a go-ahead-and-do kind of a person. I love that way of working. For me, the beginning at Hindustan Zinc was very easy, because that’s how I love to work.
Hindustan Zinc is the lowest cost producer of zinc in the world. So how does one manage being the lowest cost producer and at the same time remain a sustainability champion? Isn’t it difficult to do both?
We don’t make finished products. Our products go into making of finished products. I know very well that most of these companies we supply to comply with high environmental standards.
If they declare themselves to be green, the pressure will come back on us as we are the suppliers. So, instead of the pushing us to do it, I thought it is better that we take the lead, and Go Green ourselves, so that we remain relevant in business.
Second, how do you remain cost effective? Soon carbon price will be a reality, and the world will not allow you to emit CO2 and still do business and make profit. That realty will be in India as well soon. So, it is better that we embrace that methodology, and then look at new projects with the carbon pricing built in.
How green is your energy?
We currently have 275 megawatts of wind power, and solar power of about 40 megawatts. It is much less compared to our demand of 500 megawatts. We are about to sign a power purchase agreement with a company for supplying 200 megawatts of renewable power. With this, about 50% of our thermal power capacity will be taken over by renewable power by 2025. And by 2030, about 80% to 90% of our thermal power will be replaced by renewable power.
As an industry leader how would you define responsible mining in India? How far have we come?
The big question is – How can we ensure that we mine as much as it is needed? That we don’t over mine or waste any mineral. How can we recover maximum amount of other minerals from the waste? India has fantastic rules for mineral conservation and if you follow it will help.
World over it is a common phenomenon that people who living around the mines are not benefited from the mining activity.
In India, as well as across the globe, mining towns are desolate while mine owners and executives live well in the cities. So, how does one take care of our neighbors?
At Vedanta or Hindustan Zinc, we are 100% business partner oriented. We are collectively 25,000 work force, about 90% of them are local workforce. Unlike other mines, we engage almost all local manpower in our work. Our pay scale for contract manpower is five to six times the state wages.
Even if 100% of our operations are outsourced, we take care of our business partner employees as our own, including full health benefits. During Covid, we took care of them with 100% coverage of medical, 100% free vaccination. Our motto is – in their success, we get our success.
We also firmly believe that our business partners have a right to the profit we make. This is well-governed by our federation. Normally, other companies’ unions or federations are meant for permanent employees. In our case, business partner employees are managed by a federation. It has the power to negotiate everything on behalf of its members.
While maintaining ambient, air, water, quality etc., as per regulations, we have taken steps which are futuristic. We have decided that in the next five years we will replace all underground diesel-based equipment by battery-operated equipment. This year itself, we have started introduction of EV vehicles in the mines, and we think that is the only way to go. Our mines are fully digitalized, meaning that a lot of operations can be done from the surface.
Hindustan Zinc is water positive. Let me how you did it
We are 2.41 times water positive, and we want to become 5 times soon. We are putting up more check dams so that villages nearby can conserve water and recharge groundwater.
We are also putting up huge zero liquid discharge plants in all our smelters and mines. All the mine water that we pump out from the mine will be treated and usable at our plants. We plan to cut down on the water that we take from rivers and lakes so that there will be enough fresh water for the people to enjoy. This year we are spending about Rs. 400-500 crores on our water projects.
What are you doing about waste?
We have started recovering a lot of minerals and metals from the waste itself. Right now, our waste is from our mines is going for road construction. Many flyovers in Rajasthan would be using some of our smelter residues. We are recovering copper, zinc, and have plans for recovering cobalt. We will look at recovering nickel also in the future. Remaining residue could go for cement making. We may become waste positive in another three to four years.
Give us your 10-year vision
We will be 100% self-sufficient in water, that is we won’t need to draw any water from outside. Will use 100% renewable power. That is, not a single ounce of coal will be burnt to generate power, and 100% equipment will be battery-operated rechargeable equipment, so there will be no fossil fuel in use anywhere. In 10 years, a new HR system will take over, perhaps half of us would operate from wherever we live.
In India there’s a perception about Vedanta that it is not a very environment-friendly company. How are you addressing this?
In India whatever grows fast is put to a lot of test. If you start a business, and in five years if you strike gold, everybody will start posting that there must be something wrong. Of course, we are very aggressive, and we are not shy about that. Our chairman is very vocal on issues. His conscience is very clear.
At the end of the day, with all the zinc we produce we have made India self-sufficient. Aluminum can be supplied by Vedanta Aluminum. That’s our entrepreneurial spirit. Of course, people would love to question all these things. We are very clear; We are not doing it for personal profit, we are doing it for the country.
How is the global ranking of Hindustan Zinc looking today?
We are already at top five in Dow Jones Sustainability Index ranking, and we hope to be in top three soon. Vedanta is at 16 and is heading to be in the top 10.
Watch the SN Leader Conversation here