New Delhi: The mines ministry has told the finance ministry that selling the government’s stake in Vedanta-controlled Hindustan Zinc (HZL) is not a “wise move” as it is the only firm in India controlling production of the metal, considered strategic due to its large scale industrial utility.
In 2002-03, the government sold its 64.92 per cent stake in HZL to NRI billionaire Anil Agarwal-led Vednata Resources, while retaining 29.54 per cent.
In 2012, Mr Agarwal offered about $2.57 billion to buy the government’s remaining stake.
In a letter to the finance ministry, last month, mines ministry said that any plans to offload government’s stake in HZL would not be “a wise move as zinc is a strategic mineral”, an official said.
The letter explained that HZL is the only player in India producing zinc and controlling its known reserves located in Rajasthan. “Considering that HZL controls almost all the known reserves of the metal and is the only big player in India, it is not advisable for the government to sell its stake in the firm keeping in mind the importance of zinc,” the ministry said.
