Hindustan Zinc Receives License to Explore and Mine Tungsten Block in Andhra Pradesh

Hindustan Zinc Limited, a Vedanta Group company and the world's largest integrated zinc producer, announced on Saturday, November 15, 2025, that it has received the formal license to explore and mine a tungsten and associated mineral block in Andhra Pradesh. This development marks a significant strategic expansion for the company as it diversifies beyond its traditional metals portfolio into critical minerals essential for advanced manufacturing and national self-reliance.

Official Announcement and License Details

The company confirmed that it has been officially announced as the successful bidder for the tungsten mineral block following receipt of the formal composite license from the Andhra Pradesh state government. This license represents the culmination of a competitive bidding process that began earlier in the year when HZL was declared the preferred bidder through an auction conducted by the central government.

"Hindustan Zinc Ltd has been officially announced as the successful bidder for a tungsten and associated mineral block in Andhra Pradesh, following the receipt of the formal composite licence from the state government," the company stated in its official announcement.

Understanding the Composite License

A composite license in the mining sector is a single, two-stage concession that provides mining companies with comprehensive rights covering both exploration and production phases. Specifically, this license grants:

• Exploration rights: Authority to conduct geological surveys and exploratory drilling to assess mineral reserves
• Mining rights: Conditional right to mine and extract minerals if exploration confirms commercially viable deposits
• Integrated approach: Streamlined process eliminating the need for separate exploration and mining licenses
• Long-term planning: Enables companies to plan investments with greater certainty

This integrated licensing approach reduces regulatory complexity and provides mining companies with a clearer pathway from exploration to production, subject to successful discovery of economically viable mineral deposits.

Strategic Significance: Diversification Beyond Traditional Metals

This tungsten block acquisition represents an important milestone for the Vedanta Group company as it strategically expands beyond its core portfolio of zinc, lead, and silver. The move into tungsten reflects several strategic considerations:

Critical Mineral Status

Tungsten is classified as a critical and strategic mineral due to its essential role in:

• Defense applications: Armor-piercing ammunition and military equipment
• Aerospace: High-temperature components in aircraft and spacecraft
• Manufacturing: Cutting tools, drilling equipment, and industrial machinery
• Electronics: Electrical contacts and heating elements
• Energy: Nuclear power plant components
• Advanced technology: Semiconductor manufacturing equipment

High-Value Mineral Category

Tungsten commands premium pricing due to its unique properties including:

• Highest melting point of all metals (3,422°C)
• Exceptional hardness and wear resistance
• High density comparable to gold
• Excellent thermal and electrical conductivity
• Limited global supply concentration

Contribution to National Self-Reliance

CEO Arun Misra emphasized the national significance of this development: "This milestone marks another step forward in Hindustan Zinc's journey of expanding its mineral footprint and contributing to the nation's self-reliance in critical and strategic minerals."

This expansion aligns with India's broader objectives of:

• Atmanirbhar Bharat: Reducing dependence on imports for critical minerals
• Supply chain security: Ensuring domestic availability of strategic materials
• Defense manufacturing: Supporting indigenous defense production capabilities
• Advanced manufacturing: Enabling high-tech industrial development
• Economic security: Reducing vulnerability to global supply disruptions

Competitive Auction Process

The path to securing this tungsten block involved a rigorous competitive process. Earlier in 2025, Hindustan Zinc was declared the preferred bidder through a competitive auction conducted by the central government. This auction mechanism ensures:

• Transparent allocation of mineral resources
• Competitive pricing reflecting market value
• Selection of capable operators with technical expertise
• Maximization of revenue for government
• Efficient utilization of national mineral resources

The company's success in this competitive process reflects its technical capabilities, financial strength, and credible track record in mineral exploration and mining operations.

Hindustan Zinc's Global Standing

The tungsten expansion builds upon HZL's established position as a global leader in the metals sector:

Zinc Production Leadership

HZL is the world's largest integrated zinc producer, operating mines, smelters, and refineries that deliver zinc products to global markets. The company's integrated operations provide advantages in:

• Cost efficiency through vertical integration
• Quality control across the production chain
• Supply reliability for customers
• Operational flexibility responding to market conditions

Silver Production Excellence

The company ranks amongst the top five silver producers globally, with silver being produced as a by-product of zinc-lead mining operations. This co-production model enhances overall economics of mining operations.

Market Dominance in India

HZL holds a commanding market share of approximately 77% of the primary zinc market in India, making it the dominant domestic supplier of this essential industrial metal. This market position provides:

• Pricing influence in the domestic market
• Strong relationships with Indian manufacturers
• Economies of scale in production and distribution
• Brand recognition and customer loyalty

Global Export Presence

The company supplies to more than 40 countries, demonstrating its ability to meet international quality standards and compete in global markets. This export capability reflects:

• Product quality meeting diverse market requirements
• Logistics capabilities for international shipments
• Customer service and technical support
• Flexibility to serve various geographical markets

Tungsten: Strategic Importance for India

India's tungsten requirements have historically been met primarily through imports, creating supply chain vulnerabilities. Domestic production of tungsten offers several strategic advantages:

Import Substitution

• Reducing dependence on foreign suppliers, particularly China which dominates global tungsten production
• Improving trade balance by substituting imports with domestic production
• Protecting against supply disruptions from geopolitical tensions
• Ensuring price stability insulated from global market volatility

Manufacturing Competitiveness

• Providing domestic manufacturers with secure tungsten supply
• Reducing input costs through elimination of import premiums
• Enabling development of tungsten-based manufacturing industries
• Supporting Make in India initiatives in high-tech sectors

Defense and Strategic Autonomy

• Ensuring availability of tungsten for defense manufacturing
• Reducing strategic vulnerability in critical applications
• Supporting indigenous defense production programs
• Enhancing national security through supply security

Andhra Pradesh's Mineral Wealth

Andhra Pradesh's selection as the location for this tungsten block reflects the state's significant mineral endowment. The state hosts various mineral resources and has been actively promoting mining sector development through:

• Streamlined approval processes for mining projects
• Infrastructure development supporting mineral evacuation
• Policy stability encouraging long-term investments
• Environmental clearance facilitation
• Collaboration with mining companies for sustainable development

Next Steps: Exploration and Development

With the composite license now in hand, Hindustan Zinc will proceed with the exploration phase, which typically involves:

Geological Assessment

• Detailed geological mapping of the block
• Remote sensing and geophysical surveys
• Identification of prospective mineralization zones
• Assessment of geological structures and formations

Drilling and Sampling

• Systematic drilling programs to evaluate ore bodies
• Core sampling and assay analysis
• Resource estimation and grade determination
• Metallurgical testing for processing characteristics

Feasibility Studies

• Economic viability assessment
• Mining method selection and design
• Processing technology evaluation
• Infrastructure requirements planning
• Environmental and social impact assessment

Development Planning

• Mine development strategy if exploration confirms viable reserves
• Processing facility design and location
• Infrastructure development including roads, power, and water
• Environmental management plans
• Community development initiatives

Timeline and Investment Considerations

While specific timelines and investment amounts have not been disclosed, tungsten mining projects typically involve:

• Exploration phase: 2-4 years for comprehensive exploration
• Feasibility and approvals: 1-2 years for detailed studies and clearances
• Construction phase: 2-3 years for mine and plant development
• Production ramp-up: 1-2 years to reach full capacity

The capital investment will depend on the scale of proven reserves, mining method selected, processing requirements, and infrastructure needs.

Implications for Stakeholders

For Hindustan Zinc

• Portfolio diversification into high-value critical minerals
• Potential for premium pricing given tungsten's strategic nature
• Strengthened position as diversified mining company
• Enhanced contribution to national strategic objectives
• Long-term growth opportunity beyond traditional metals

For Vedanta Group

• Expansion of group's critical minerals portfolio
• Demonstration of capability in new mineral categories
• Strategic positioning in government priority sectors
• Potential template for further diversification

For Andhra Pradesh

• Development of mineral resources generating state revenues
• Employment opportunities in mining and associated industries
• Infrastructure development in mining regions
• Industrial development based on local mineral availability
• Tax revenues and economic multiplier effects

For India

• Progress toward critical mineral self-reliance
• Reduced import dependence for strategic materials
• Enhanced defense and industrial manufacturing capabilities
• Development of domestic tungsten supply chain
• Contribution to Atmanirbhar Bharat objectives

Environmental and Social Considerations

As Hindustan Zinc proceeds with exploration and potential development, the company will need to address:

• Environmental protection: Minimizing ecological impact through best practices
• Water management: Ensuring sustainable water usage and preventing pollution
• Community engagement: Consultation with local populations and benefit sharing
• Rehabilitation plans: Post-mining land restoration and repurposing
• Regulatory compliance: Adherence to environmental and mining regulations

Conclusion

Hindustan Zinc's receipt of the license to explore and mine the tungsten block in Andhra Pradesh marks a strategic expansion into critical minerals essential for advanced manufacturing and national self-reliance. As the world's largest integrated zinc producer diversifies into tungsten, the company is positioning itself to play a crucial role in India's efforts to reduce import dependence for strategic materials while potentially creating a new growth avenue beyond traditional base metals.

The success of this venture will depend on exploration outcomes, economic viability, and execution capabilities, but the strategic significance for both the company and the nation is already evident.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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Food Inflation Expected to Cool in H2FY26 on Better Monsoon, But Adverse Base Effect May Push FY27 Rates Higher

Food inflation in India is anticipated to remain under control during the second half of the current financial year (H2FY26), supported by favorable monsoon rainfall and improved agricultural sowing conditions. However, an ICICI Bank Global Markets sectoral update has cautioned that an "adverse base effect" could drive food inflation higher in the subsequent fiscal year (FY27), presenting challenges for policymakers and consumers alike.

Understanding the Base Effect

The base effect phenomenon plays a crucial role in inflation calculations and can significantly influence reported inflation rates even when actual price levels remain stable. Simply put, inflation can appear unusually high or low depending on the price levels recorded in the corresponding period of the previous year.

For example, if food prices were particularly low in FY26 due to good harvests and favorable weather, the same absolute price levels in FY27 would result in higher year-on-year inflation rates simply because the comparison base is lower. This statistical artifact, rather than actual price increases, can create the appearance of rising inflation.

Near-Term Outlook: H2FY26 Optimism

According to the ICICI Bank report, the outlook for the remainder of FY26 appears favorable for food price stability. The analysis stated: "Higher rainfall and sowing bode well for the outlook in H2FY26, but an adverse base should push food inflation higher next year (FY27)."

Supporting Factors for H2FY26

Several positive developments are expected to keep food inflation contained through the second half of the current fiscal year:

• Better monsoon performance: Above-normal or well-distributed rainfall has benefited agricultural production
• Improved sowing conditions: Favorable weather has enabled timely planting across crops
• Steady supplies: Continued supply of agricultural commodities from good harvests
• Favorable weather patterns: Conducive conditions for crop growth and maturation
• Government interventions: Policy measures to ensure stable prices and adequate supplies

Recent Wholesale Inflation Trends

The optimistic near-term food inflation outlook aligns with recent wholesale price data showing significant cooling in price pressures. India's wholesale inflation has eased to its lowest point in more than two years, providing relief to businesses and consumers.

October Wholesale Inflation Performance

In October, wholesale inflation slipped further into contraction territory, primarily driven by a sharp decline in primary food articles. Key observations include:

• Vegetable prices: Continued to ease due to steady supplies and favorable weather conditions
• Cereals: Recorded price declines reflecting adequate production
• Pulses: Showed falling prices amid improved availability
• Spices: Witnessed price corrections after earlier increases
• Fruits: Also recorded declining prices

Month-on-Month Stability

Month-on-month food prices remained broadly steady, suggesting that the sharp disinflation witnessed earlier is now stabilizing rather than continuing to accelerate downward. This stabilization indicates that prices may be approaching equilibrium levels after the significant corrections seen in recent months.

Primary Articles Category Performance

The wider primary articles category posted another month of contraction, extending its streak of negative inflation readings. This persistent contraction stems from weak pricing in both food and non-food items within the category.

The sustained contraction in primary articles reflects:

• Adequate agricultural production meeting demand
• Weak demand for certain raw materials
• Global commodity price corrections filtering through to domestic markets
• Effective supply chain management ensuring availability

High-Frequency Items: Key Price Corrections

The report highlighted that corrections in key high-frequency food items have played a major role in pulling down wholesale food inflation during the current year. These items, which consumers purchase frequently and which significantly impact household budgets, include:

Tomatoes

Tomato prices, known for their volatility, have witnessed substantial corrections from earlier elevated levels. Improved supplies from multiple growing regions and favorable weather have enabled price normalization.

Onions

Onion prices have also corrected significantly, providing relief to consumers after periodic price spikes that characterize this politically sensitive commodity. Better crop management and government interventions have contributed to price stability.

Grains

Some grain varieties have recorded price declines, reflecting adequate production and healthy stock positions. Government procurement and distribution policies have helped maintain price stability in this essential category.

Fuel Inflation Dynamics

Fuel inflation has remained in negative territory, contributing to overall wholesale price moderation. The key driver has been lower global crude oil prices compared to the previous year, which have filtered through to domestic fuel costs.

While a few petroleum products experienced sequential price increases on a month-to-month basis, the broader fuel and power index remained subdued. This stability in energy costs has positive second-order effects on food inflation by keeping transportation and farming input costs contained.

Manufactured Products Inflation

Inflation in manufactured products has also moderated, with easing prices observed in metals and some industrial inputs. This broad-based price cooling reflects:

• Softer global commodity prices
• Improved supply chain efficiency post-pandemic disruptions
• Moderate demand growth limiting pricing power
• Competition among manufacturers

Sectors Showing Price Firmness

However, certain segments have bucked the broader disinflationary trend, showing firming price pressures:

• Jewellery: Rising prices reflecting gold and precious metal dynamics
• Tobacco products: Price increases potentially driven by taxation and input costs
• Pharmaceuticals: Upward price movements in certain drug categories
• Select fabricated metals: Specific metal products showing price firmness

These pockets of price pressure indicate that global commodity movements could create some upward inflationary pressure in the months ahead, even as the broader trend remains disinflationary.

FY27 Outlook: Base Effect Challenges

While H2FY26 appears favorable for food price stability, the outlook for FY27 presents different challenges. The ICICI Bank report's warning about an "adverse base" reflects the statistical reality that:

• FY26's low food price levels will create a low comparison base
• Normal price levels in FY27 will appear inflationary when compared to this low base
• Even stable absolute prices could result in higher reported inflation rates
• Policymakers will need to distinguish between base effects and actual price pressures

Implications for Monetary Policy

The divergent inflation outlook between H2FY26 and FY27 presents interesting challenges for the Reserve Bank of India's monetary policy formulation:

Near-Term Considerations (H2FY26)

• Benign food inflation may provide room for accommodative policy stance
• Focus can shift to supporting growth alongside inflation management
• Interest rate decisions may prioritize economic momentum
• Policy communication can emphasize growth-inflation balance

Medium-Term Challenges (FY27)

• Need to distinguish base effect-driven inflation from demand pressures
• Communication strategy to manage inflation expectations
• Potential for policy tightening if base effects are misinterpreted
• Balancing growth support with inflation credibility

Agricultural Production and Monsoon Impact

The favorable near-term food inflation outlook is fundamentally anchored in agricultural production dynamics. Better monsoon performance in FY26 has translated into:

• Kharif crop success: Strong summer crop production
• Rabi crop prospects: Good conditions for winter sowing
• Reservoir levels: Adequate water storage for irrigation
• Soil moisture: Favorable conditions for crop growth
• Reduced crop stress: Lower risk of weather-related damage

Government Policy Interventions

Government policies have played a supportive role in managing food prices:

• Buffer stock management: Strategic release during price spikes
• Import-export policies: Adjustments to ensure adequate domestic supply
• Minimum support prices: Providing farmers production incentives
• Targeted distribution: Public distribution system ensuring access
• Market interventions: Direct purchases to support prices when needed

Consumer Impact and Household Budgets

The food inflation trajectory has significant implications for household budgets, particularly for lower and middle-income families where food constitutes a larger share of expenses:

H2FY26 Benefits

• Stable or declining food prices increase real purchasing power
• Household budget relief enabling discretionary spending
• Reduced stress on vulnerable populations
• Support for consumption-led economic growth

FY27 Considerations

• Potential for renewed price pressures from base effects
• Need for income growth to offset any price increases
• Importance of productivity gains in agriculture
• Role of wage growth in maintaining consumption capacity

Global Commodity Price Influence

While domestic factors dominate food inflation dynamics, global commodity movements remain relevant:

• Crude oil prices: Impacting transportation and input costs
• Fertilizer costs: Influencing agricultural production expenses
• Global food prices: Affecting import parity for tradable commodities
• Exchange rate movements: Impacting import costs
• Geopolitical developments: Potentially disrupting global supply chains

Sectoral Variations and Outlook

Different food categories may exhibit varying inflation trajectories:

Likely to Remain Stable

• Cereals with adequate production and stocks
• Vegetables with normal seasonal supply patterns
• Pulses if imports supplement domestic production

Potential Pressure Points

• Edible oils depending on global price movements
• Protein items if feed costs increase
• Spices based on export demand dynamics

Investment and Business Implications

The inflation outlook has implications for various business sectors and investment decisions:

• FMCG companies: Benign inflation supporting volume growth and margins
• Food processors: Stable input costs improving profitability
• Retailers: Price stability supporting footfall and sales
• Agricultural inputs: Demand patterns influenced by crop economics
• Food service sector: Margin management with stable commodity prices

Monitoring Indicators

Key indicators to watch for evolving food inflation dynamics include:

• Monthly wholesale and consumer price inflation data
• Agricultural production estimates and harvest progress
• Reservoir levels and irrigation water availability
• Government stock positions and release policies
• Global commodity price trends
• Weather forecasts and crop condition reports
• Demand indicators from high-frequency consumption data

Conclusion

The food inflation outlook for India presents a tale of two periods: near-term stability in H2FY26 supported by favorable agricultural conditions and good monsoon performance, followed by potential base effect-driven inflation increases in FY27. While the immediate future looks benign for food prices, policymakers, businesses, and consumers should prepare for the statistical artifact of adverse base effects pushing reported inflation rates higher next year, even if actual price levels remain stable.

Understanding this dynamic is crucial for appropriate policy responses and economic decision-making in the coming fiscal year.

Disclaimer: The views and investment tips expressed in this article are for informational purposes only and do not represent financial advice. The views expressed are those of the sources cited and not necessarily those of this website or its management. Investing in equities or other financial instruments carries the risk of financial loss. Readers must exercise due caution and conduct their own research before making any investment decisions. We are not liable for any losses incurred as a result of decisions made based on this article. Please consult a qualified financial advisor before making any investment.

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