EMERGING RISKS

Emerging risks are those that may become a top risk in time but is not expected to materialise in the next five years. Emerging risks that are currently being monitored are:

EMERGING RISK 1

Adoption of evolving technology in mining and smelter processes may pose a competitive disadvantage to Hindustan Zinc.

Description

• Traditional practices and infrastructure limitations may result in the Company struggling to integrate new technologies in mining and smelting, potentially limiting efficiency and competitiveness
• Rapid technological advancements in the metals and mining sector and the need to implement them may stress finances, hindering our ability to innovate and modernise
• Transitioning to newer technologies may necessitate investments in training programmes to equip employees with the necessary skills for a smooth transition and optimal utilisation of such technologies
• Geopolitical tensions and trade restrictions hinder the smooth transfer of technology between countries, impeding our ability to access and integrate cutting-edge technologies developed elsewhere, potentially stalling progress and development within the industry

Possible Impact

• Decreased operational efficiency and competitiveness, leading to lower production output and increased costs compared to competitors with modern technologies
• Reduced productivity and effectiveness of operations, due to lack of skilled workforce, hindering our ability to fully leverage technological advancements and maintain pace with industry standards
• Limited capacity for innovation and modernisation, potentially resulting in outdated processes and equipment, which may lead to higher operational costs and decreased profitability in the long run
• Hindered technological advancement and limited access to cutting-edge solutions, potentially resulting in missed opportunities for efficiency gains and competitive advantage in the global market

Mitigating Actions

Hindustan Zinc is a progressive organisation and a pioneer in adopting cutting-edge technologies, emphasising automation, digitalisation and innovation. These areas represent strategic focusses, reflecting our strive for sustained excellence and staying ahead of the curve. Some of the key initiatives taken are as follows:

• Automation and tele-remote features in production drills during changeover for additional output
• Artificial intelligence (AI)/machine learning (ML) based image processing technologies for identifying unsafe acts or conditions on the shop floor
• Video analytics-based model for physical surface quality inspection of finished goods (zinc ingots), and detect physical defects for timely corrective action
• Drones for health monitoring of inaccessible structures, safely and remotely; visual, thermal and ultrasonic inspection (non-destructive testing) further enable assessing aspects such as the thickness of steel structure, ensuring timely maintenance
• Drone-based light detection and ranging (LiDAR) mapping system to capture essential data of critical underground (UG) mine excavations, securing valuable insights to optimise mine development and operations
• Internet of Things (IoT)-based smart sensors to identify and minimise the idle time of low-profile dump trucks (LPDTs), reducing diesel consumption and overall cost per hour (CPH)
• Advanced process control (APC) at mills eliminate operator-induced variations and ensures consistent and stable plant operations, resulting in consistent concentrate grade and recovery improvement by 1% with optimised throughput
• Collision avoidance system to improve operator’s situational awareness in mining, preventing machine-to- machine and man-to-machine interaction