Hindustan Zinc, the Anil Agarwal-promoted Vedanta Resources Plc arm that is set to become the world's largest integrated zinc and lead producer by 2010, will be Asia's largest producer of silver by 2013.

Hindustan Zinc said it would be counted among the world's top 6 silver producers after the expansion. Akhilesh Joshi, chief operating officer, said, "The company has been constantly increasing its silver production in the past years. By 2013, we will produce 500,000 kg of silver. This will give a boost to the domestic allied industry."

By 2010, the company, which is in the third phase of expansion, hopes to increase its zinc production by 210,000 tonne and its lead output by 100,000 tonne. Hindustan Zinc obtains silver as a by-product while mining lead. Its Sindesar Khurd mine, which is currently under expansion, is known to be rich in silver. The company has a 2.5% share of the domestic silver market. India imports as much as 77% of its silver needs and recycles 19%. On condition of anonymity, a Hindustan Zinc official said, "When silver production reaches 500,000 kg, we will be able to supplement over 20% of the domestic demand for the precious metal."

Analysts feel that the increase in silver production will save India the money that is spent on imports. "It will directly benefit allied industries and exports of the finished products may increase, creating new jobs in the sector," said an analyst, requesting anonymity. Between April and December 2008, Hindustan Zinc produced about 70,000 kg of silver as against 80,400 kg in financial year 2007-08. The company is targeting output of 100,000 kg by the end of the current fiscal. According to the World Silver Survey of 2008, India produced only 89,000 kg of silver in FY08 against the demand of 3,200,000 kg.

"Global silver production rose by 4% in 2007, with strong gains from Chile, China and Mexico. Silver mine production reached 20,674,000 kg last year. Peru was the world's biggest mining country with 3,462,000 tonnes of silver, followed by Mexico, China, Chile and Australia," the survey said.