New Milestones in Environment Protection

Environment protection is a key priority in our Environmental, Social and Governance (ESG) journey, and we continued to make sustained efforts to minimise the environmental impact of our operations during the year. These included programmes to lower carbon emissions, improve air quality and nurture biodiversity in addition to water and waste management. We also focussed on resource management and controls to reduce our environmental footprint.

Focus Areas

Energy & Climate Change Management

Water Stewardship

Tailings Dam Management

Waste Management

Maintaining Air Quality

Biodiversity Management

Energy and Climate Change Management

Globally, there is greater focus on energy transition and more effective actions for climate change mitigation. Both developed and developing nations are increasingly investing in impactful solutions to lower emissions and minimise their carbon footprint to create a more sustainable future. The global transition towards net-zero carbon emissions has led to significant growth in the manufacturing and sales of solar photovoltaic (PV) panels and energy storage solutions, which in turn is expected to create additional demand for our products – zinc, lead and silver.

At Hindustan Zinc, we pursue a focussed strategy in line with the globally-evolving market to scale our capacities and capabilities to meet the growing demand for our products. We have initiated industry-leading innovative measures to steer our net-zero journey to demonstrate progress towards our sustainability vision.

Towards 1.5°C – Focussed on Renewable Energy

As part of our net-zero journey, Hindustan Zinc continually strives to address climate change. We have revised our emission targets, to make them more stringent. Verification and confirmation of these targets is awaited from the Science-Based Targets initiative (SBTi). These target revisions will assist the Company in achieving net-zero emission by 2050 or sooner in the long-term, and in the short-term will serve to reduce Scope 1 and Scope 2 emissions by 50% and Scope 3 emissions by 25% by 2030, in line with the business ambition for 1.5˚C campaign led by the SBTi in partnership with the UN Global Compact and the ‘We Mean Business’ coalition.

Our green power capacity stands at around 354.74 MW, which includes 273.5 MW of wind power (non-captive), 40.57 MW of solar power (captive) and 40.67 MW of waste heat recovery power. Our captive thermal, solar and waste heat recovery power plants provide low-cost and reliable power to our operations.

We have aligned our climate change risk assessment with guidelines specified by the task force on climate-related financial disclosures (TCFD). It is our constant endeavour to expand renewable power under our greenhouse gases reduction goals. We have entered into two power delivery agreements for supply of 200 MW and 250 MW of renewable power, which will not only strengthen our commitment towards a clean future but also serve to reduce emissions to the tune of 2.7 mn tCO₂e annually. With this collaboration, about 53% of our thermal power capacity will be taken over by renewable power.

Our Pantnagar Metal Plant sourced 100% green power for its operations during the year, thus making it a one-of-a- kind initiative that led the Company towards reduction in emissions by 30,000 tCO₂e.

In FY 2022-23, our ambitious project of turbine revamping resulted in avoidance of emissions by 156,691 tCO₂e. We could also reduce coal consumption by using biomass as an alternative fuel, which led to an emission reduction by 89,896 tCO₂e.

Steering the Electrical Vehicle Journey

We have made major investments in technology to achieve our net-zero goal by progressively adding batteryoperated electric vehicles (EVs) to our fleet for use in our underground (UG) operations. This action makes Hindustan Zinc the first company in India to introduce battery-operated vehicles in UG mines. EVs are a globally recognised means to alleviate dependence on petroleum products and reduce CO₂ emissions and are an essential part of our sustainability efforts.

As part of this decarbonisation journey, we plan to invest US$ 1 billion over the next few years, which would include mitigation and adaptation measures.

Hindustan Zinc has also signed a Memorandum of Understanding (MoU) with Epiroc Rock Drills AB, Normet Group Oy and Sandvik AB to introduce battery electric vehicles (BEV) in its UG mining operations. This partnership will allow the Company to replace diesel-powered equipment with EVs, thus making our mining operations safer and cleaner. In January 2023, we introduced a Normet Agitator SmartDrive EV into our UG mining operations.

In another initiative, we have inducted the LNG-powered truck for transportation to enable a reduction in greenhouse gas (GHG) emissions.

We have also initiated measures to drive electric mobility in our supply chain. For transportation of concentrate from our mines to smelters, we have initiated piloting with EVs, which is a significant move to ensure reduction in our value chain and Scope 3 related emissions. As per our policy to establish a green value chain, our business partners too have introduced EVs in their operations, while electric forklifts are now being used in our multiple business units.

Launching India’s First UG BEVs in Mining Operations

At Hindustan Zinc, we are committed to enable sustainable and environment-friendly mining operations to steer our goal of ‘net-zero carbon by 2050’ or sooner. In line with this goal and our ESG commitment of ‘Transforming for Good’, we have inducted India’s first BEVs in UG mining operations.

Hindustan Zinc signed separate MoUs with all major original equipment manufacturers (OEMs) between February 2021 and July 2021 for the induction of the first set of BEVs. Two of these equipments, Agitator and Charmec, were received at the mining site during the year, while the third (Spraymec) is expected to arrive in the next financial year. The infrastructure for charging of the equipment was completed after official approval from DGMS.

The challenge in the implementation of this initiative was mainly three-fold, which we could successfully overcome in FY 2022-23:

• Installing the charging stations at desirable locations for maximum utilisation
• Obtaining statutory permission in terms of consent to operate BEV in UG mines
• Training of operators and ensuring expertise in maintenance of the equipment

Benefits

Boosting Energy Efficiencies

Implementation of numerous energy-saving initiatives across Hindustan Zinc have led to cumulative savings of 581,915 GJ. In FY 2022-23, Hindustan Zinc produced solar power of 76.16 mn units, waste heat energy of 227.89 mn units, and wind power of 409.26 mn units.

Performance

Steering Water Stewardship

Hindustan Zinc understands the importance of water usage and aligns its vision with the SDG 6 of ‘clean water and sanitation’ by taking concrete steps towards water stewardship. In line with its vision of ‘Zero Harm, Zero Waste, Zero Discharge’, the Company aims to:

Strategy to Achieve the Aims

At Hindustan Zinc, we are working to achieve our water stewardship goals through a strategic approach that identifies the following elements:

Zero Liquid Discharge

We have strengthened Zero Liquid Discharge (ZLD) plants at Dariba, Debari and Chanderiya smelting locations, with additional capacities of 3,200 KLD, 3,000 KLD and 600 KLD respectively, to steer our water stewardship journey. Works have been initiated for ZLDs at Rampura Agucha mines and Zawar mines with targeted capacities of 3,800 KLD and 3,500 KLD respectively. This project has served to clock water recovery by more than 90%, leading to an improved utilisation and corresponding reduction in the requirement of water.

Impact

• Increase in water recycling

• Less requirement of freshwater due to reutilisation of waste-water

• Uptake enabled in the in-house recovery of sodium salts (Na₂SO₄)

Besides being focussed on completing actions that align with UN Sustainability Goals, we are also committed to the UN Global Compact Water Action Platform (CEO Water Mandate) for adoption and implementation of the mandate’s strategic framework and its six core elements for water management.

Governance Structure: Water Management

Our Board-level Sustainability and ESG Committee is aligned with our water stewardship commitment and facilitates our efforts towards the accomplishment of our 2025 goals and ESG priorities. The Board Committee is supported by the Executive Sustainability Committee chaired by the Chief Executive Officer (CEO) at the corporate level, that includes senior executives to oversee delivery of the programmes. Under the Executive Committee, there is a Water Management Community, which is responsible for managing all the water-related risks and opportunities. This community meets every month to review the progress against their respective goals, water related risks, and mitigation efforts.

Water Risk Assessment

To manage our water impact efficiently, we first need to understand the specific risks at our operating sites, and our overall impact on water resources. To this end, we have conducted a detailed water risk assessment across Hindustan Zinc. The objective of this study was to conduct a sensitivity analysis and stress testing for water-related risks and calculate an apt water pricing structure for the Company. Considering the various quantitative and qualitative tools available for undertaking such an assessment, we have used WBCSD’s India Water Tool, WRI Aqueduct and GEMI local water tools, among others, for our study.

These tools have helped us to identify and assess risks and develop a management strategy. An analysis of the futuristic scenario by Aqueduct Water Risk Atlas showed that water-stress indicators are high in most of our locations. Regardless of the level, however, we apply rigorous standards and processes to manage risks.

Water Performance for FY 2022-23

Best-in-class Tailings Dam Management Practices

At Hindustan Zinc, we have adopted best-in-class global practices in tailings dam management to ensure business sustainability. We have associated with global experts to provide long-term monitoring and consultancy on the design, construction and operation of our tailings storage facilities (TSFs). We are guided in this process by the Group’s tailings management facility standard for our three active dams. We repurpose tailings materials and waste rock as backfill, wherever possible. The remaining tailings are kept in specially designed storage conditions to minimise their environmental, social, and economic risks.

Tailings Management Plan

Our TSFs are governed by the tailings management plan, which provides for sound storage practices. Effective implementation of a management plan not only helps to maintain a safer TSF but also serves to reduce the overall costs associated with operation and closure of the facility.

Following Best Practices

We maintain high standards of care in design, construction, safe operation and closure of TSFs. We follow some best practices like:

• Adoption of a clear policy on tailings management, backed by a strong organisational commitment for implementation of safe and responsible practices
• Establishment of a TSF Committee of in-house experts to strengthen compliance with the Group’s TSF standard
• Selection of reputed engineering firms for TSF designing
• Conducting periodic TSF risk assessment and formulating mitigation plans to minimise associated risks
• Tailings utilisation in back filling through paste fill/hydro fill
• Replacement of wet tailings disposal system with dry tailings disposal
• Collection and recycling of supernatant water in process
• Construction of garland drains around the dams to maintain zero liquid discharge
• Adoption of a novel, satellite-based interferometric synthetic aperture radar (InSAR) monitoring technique to provide early warning of surface ground movements

Geotech Monitoring of Tailings Dam

We deploy various advanced tools and methods in geotech monitoring of our dams. These include:

• Pillar-prism-total station data for measurement of slope displacement
• Piezometer for measurement of pore water pressure
• Inclinometer for measurement of sub-surface deformation
• Cameras placed strategically to monitor security of these structures

Our internal assurance processes verify that our managed TSFs operate in accordance with the Group’s standard. Our TSFs have emergency response plans – tested through training exercises in collaboration with stakeholders. During the year, a third-party audit was conducted to identify any deficiencies against Global Industry Standard on Tailings Management (GISTM) requirements, as per the Group’s business target to fully implement all the GISTM principles by December 2024.

Minimising Air Emissions

To ensure clean air, we are focussed on reduction of particulate matter emissions, and gases emitted by our operational activities, including mining, materials handling, processing and transportation. We are committed to measure, control and minimise air emissions at each site and invest in systems and procedures to address the concerns of local communities. We stringently adhere to the conditions of our environmental licence. We have installed online continuous emissions monitoring systems, directly connected with the servers of the Pollution Control Board.

Biodiversity Assessment & Mitigation Measures

We have assessed the possible negative impact of our operations on biodiversity and accordingly implemented various mitigation programmes and plans in collaboration with several organisations to enhance our performance in biodiversity conservation and significantly reduce its impact on the ecosystem.

Protecting Biodiversity

We have prepared exclusive biodiversity management plans (BMPs) for each of our operational sites. Our dedicated biodiversity policy and management standard provides the guidance on ways to avoid, minimise, and compensate for disruption to flora and fauna, from project scoping to site closure and beyond.

We are working towards the goal of no net loss of biodiversity and net positive gain of biodiversity (for a critical habitat) at all our operations. Our biodiversity management initiatives include biodiversity risk assessment, afforestation programme, restoration of exhausted waste dumps, conservation of schedule-1 fauna species, awareness, and partnership, etc.

We have engaged with the International Union for Conservation of Nature (IUCN) for revisiting our BMP and to align our actions towards no net loss. Our 3-year engagement with IUCN covered:

• Reframing of the biodiversity policy/technical standard and guidance note towards achieving the immediate goal of no net loss and to work in line with global standards
• Reviewing current BMPs and practices, develop site-specific biodiversity and ecosystem services management protocols, considering global best practices with a mission to achieve no net loss
• Development of annual action plan with reference to BMP and biodiversity policy, and support in the implementation of the BMP
• Training and building the capacities of employees in biodiversity and ecosystem services management

To develop BMPs for all our Rajasthan-based units, we have conducted a study to assess the impact and dependency of our direct operations on biodiversity. We have planted over 3.4 lakh saplings of native species across these locations since FY 2019-20.

Hindustan Zinc has joined the task force on nature-related financial disclosures (TNFD) to pilot a risk management and disclosure framework to address the current needs of the organisation by factoring nature-related risks and opportunities into financial and business decisions. We are working with ICMM – an organisation that develops for its members responsible mining principles – on TNFD piloting.

IBAT Study

We conducted an Integrated Biodiversity Assessment Tool (IBAT) study through IUCN for all our Rajasthanbased locations. The report presents the results of proximity analysis to identify the biodiversity features and species located within the 10 km buffer zone.

The IBAT study helps to identify areas of high risk or threat due to an operational activity and enables users to implement responsible investment decisions. Based on the IBAT study outcome, none of our operations are located in any of the identified biodiversity hotspots or protected areas.

Sarus Crane and Painted Stork at Dariba Photo courtesy: International Union for Conservation of Nature (IUCN) Team

Ecosystem Service Review

Ecosystem service review (ESR) is a structured methodology to help businesses develop strategies for managing risks and opportunities arising from their dependence and impact on ecosystems. It is a tool for corporate strategy development and can serve to augment existing environmental management systems. This review was done by IUCN for all Rajasthan-based locations to ‘identify business risks and opportunities arising from ecosystem change’.

Objective

We initiated this review with the following objectives:

Site Closure Planning

At Hindustan Zinc, the approach to site closure is part of our sustainable mining plan, and plays a crucial role in identifying, minimising or mitigating and managing the risks: environmental, socio-economic, health and safety besides reputational risks, associated with site closure. It is highly important to own a sustainable site closure plan that incorporates stakeholder engagement and land rehabilitation and plans the closure in a way that ensures environmental and social stability.

Although none of our mines are currently near closure, we already have in place progressive closure plans for all our mines, in alignment with international standards, such as ICMM Principles, IFC performance standards, and IFC EHS guidelines besides conforming with the Group’s technical standard on site closure and other statutory requirements. The closure plan also contains systematic impact and risk assessment focussing on both environmental and social issues.

We work closely with our stakeholders, including local communities and government agencies, when considering post-closure land use and related objectives. The involvement of local communities in closure plan development ensures that their requirements and concerns are identified and addressed. Hindustan Zinc is committed to the rehabilitation of land to minimise any negative impact of closure and to set aside sufficient funds to cover closure and rehabilitation. The Company has in place measures to address and avoid any environmental or landscape impacts of site closure.

The mine closure plan is updated at least once every five years, or when any material change occurs to mine development plans. Responsibility for the implementation of each part of the closure plan is clearly assigned, establishing a clear line of accountability and authority. Progress against the closure plan is required to be periodically communicated to all the internal stakeholders and relevant external stakeholders in a transparent manner. To ensure successful implementation of the site closure plan, we maintain a financial provision for closure costs, which is held separately from our operational funds.

Banning Single Use Plastic

Hindustan Zinc strongly believes in creating long-term value leading to a green and sustainable future. It has banned single use plastic from July 1, 2022. The Company has replaced all single use plastic (SUP) with other suitable material or compostable/biodegradable plastic.

We strongly believe that behavioural changes will serve to lead our efforts towards elimination of SUPs. We have accordingly banned use of products like plastic cutlery, polystyrene, PVC banners less than 100 microns in all our units, offices and townships. We have issued advisories to keep away products like plastic water bottles, food packages, plastic bags, etc., and switch to reusable and durable alternatives. We are encouraging our supply chain to find alternatives to SUP and have introduced terms and conditions with respect to SUP and the Plastic Waste Management (Amendment) Rules, 2022, along with request for quotation (RFQ) for all vendors.

Miyawaki Afforestation at Rajpura Dariba Complex (RDC) and Chanderiya Lead-Zinc Smelter (CLZS)

Description

The Miyawaki method is a technique to create dense forests with native plants. It mimics the way a forest would recolonise itself with native species naturally occurring in the specific climate conditions of an area if humans stepped away.

In the Miyawaki method, plant growth is 10 times faster, and plantation is 30 times denser than usual, thus leading to higher carbon sequestration. It involves planting dozens of native species in the same area, helping it become selfsustaining after the first three years. It is chemical-free and supports local biodiversity.

Hindustan Zinc Publishes 1st Environmental Product Declaration for Zinc Products

During FY 2022-23, Hindustan Zinc published its first environmental product declaration (EPD) for its zinc products, thus reinforcing its commitment to sustainability, transparency and minimising its environmental footprint. EPD is an independently verified and registered document that communicates transparent and comparable information about the life-cycle environmental impact of products.

The Company, through its sustainable business practices, provides long-term value for its stakeholders, communities and the environment. The EPD provides objective, comparable, and third-party verified data on the environmental performance of the Company’s products throughout their lifecycle. Hindustan Zinc’s EPD can be compared with EPDs from other manufacturers around the world, as it complies with ISO 14025:2006 and EN 15804:2012+A2:2019 standards.

The life cycle assessment (LCA) study conducted to develop the EPD for the Company’s zinc products was in line with ISO 14040 and ISO 14044 standards. LCA provides a holistic approach for measuring the environmental performance of zinc products by considering the potential impact from each stage of manufacturing, product use and end-of-life.