Vedanta Group-owned Hindustan Zinc, India’s biggest producer of the industrial metal, expects green power to help slash output costs by a further $35 a tonne in the next two years, building on December quarter’s improvement in production expenses that were the lowest in nearly four years.“The key levers from here will be to improve the renewable energy share,” chief financial officer Sandeep Modi told ET in an exclusive interaction “Every 2% increase in the renewable energy share reduces cost by $1 per tonne, and at a company level, this means $1 million,” he said.

The company currently has 15% of renewable energy in its total mix, which is expected to rise up to 70% over two years. It has a power delivery agreement with Serentica Renewables for the supply of renewable energy.

For Hindustan Zinc, also the largest silver producer in India, the cost of producing zinc was $1,041 per tonne in the December quarter, against its guidance of $1,050 $1,100 per tonne for the year.

The company will also benefit from scale, as fixed costs will get distributed once its additional capacities come on board. For mining businesses, nearly a third of the costs are fixed.

“In FY27, our cost of production (for zinc) should be below $1,000 per tonne,” Modi said.These cost efficiencies, along with higher prices of zinc and silver, helped the company clock-in its highest profit in nine quarters at ₹2,678 crore, and the third-highest operating profit of ₹4,539 crore in the December quarter.Its operating margins surged 400 bps on year to 53%, while revenue rose 18% on year to ₹8,614 crore and were the third-highest ever.

While prices of zinc were 22% higher on year on London Metal Exchange, those of silver surged 35% on year. Lead prices were down 5% in the period.

Hindustan Zinc’s operating profit from its silver operations accounted for more than a third of the total operating profit, against a 17% contribution to the revenue.