Sterlite Industries (India) Limited - Sterlite Industries India Ltd.

Mines
Rampura Agucha
The Rampura Agucha zinc mine is located in Gulabpura, District Bhilwara in the State of Rajasthan, Northwestern India. It can be accessed
by paved road from the major centers of Udaipur, approximately 225 kilometers to the south, and Jaipur, the capital of the State of Rajasthan,
which lies approximately 235 kilometers to the north. The nearest railway to the mine lies approximately five kilometers to the west. This
railway provides access to Jaipur in the north and Chittorgarh in the south where the Chanderiya lead-zinc smelting facility is located.
The Rampura Agucha deposit was the largest lead-zinc mine in the world in terms of contained zinc deposits on a production basis and the
fourth largest on a reserve basis in 2008, according to Brook Hunt. It is a sediment-hosted zinc deposit which lies within gneisses and schists of
the Precambrian Mangalwar Complex. The main ore body is 1.5 kilometers long and has a width ranging from five meters to 120 meters with
an average of approximately 58 meters. It extends from the surface with recent exploration intersecting up to 15-meter wide mineralized zones
at depths of over 900 meters. The southern boundary of the ore body is sharp and steeply dipping while the northern margin is characterized by
a thinning mineralized zone. Grades remain relatively consistent with depth. The ore body consists of sphalerite and galena, with localized
concentrations of pyrite, arsenopyrite, pyrrhotite and tetrahedrite-tennantite.
The Rampura Agucha mine is India’s largest producer of lead and zinc ore and one of the largest producers in the world. The ore body is
mined by open-pit methods. The capacity of the mine and concentrator was expanded between 2003 and 2008 from 2.4 million tpa to
5.0 million tpa at a cost of Rs. 4,318 million ($84.9 million) through the purchase of additional mining equipment, upgrades to the truck fleet,
improvements to the operational efficiency of the plant and the installation of a new semi-autogenous, or SAG, mill and ball mill circuit.
Further expansion projects are ongoing to increase the capacity of the Rampura Agucha mine to 6.0 million tpa by mid-2010.
Mining at Rampura Agucha is a simple drill and blast, load and haul sequence using 95-ton trucks and nine and 15-cubic meter excavators.
Ore is trucked to the primary crusher at the mill and waste is trucked to the waste dump. The mining equipment is all owner-operated. The
processing facility is a conventional crushing, milling and differential lead-zinc floatation plant which was commissioned in 1991. Ore from the
open-pit is crushed in a series of three crushing circuits and then milled in three identical milling circuits, comprising a rod mill in open circuit
and a ball mill in closed circuit. The milled ore is then sent to the lead flotation circuit which includes roughing, scavenging and three stages of
cleaning. The lead concentrates are thickened and filtered ahead of storage and transport to the Chanderiya lead smelter. The lead flotation tails
proceed to zinc flotation which comprises roughing, scavenging and four stages of cleaning. Zinc concentrates are thickened and filtered ahead
of storage and transport to all three of the HZL zinc smelters. Zinc flotation tails are thickened ahead of disposal to the tailings dam.
Exploration at Rampura Agucha since 2004 has resulted in significant increases in the reserves at the mine. Following an extensive drilling
program (139 holes, approximately 70,200 meters) to convert resources to reserves, better define the boundaries of the ore body, add resources
and conduct open-pit re-optimization, as well as the commencement of potential underground mine project work, the reserve was increased by
27.8 million tons to 67.9 million tons as of March 31, 2009 with an average grade of 13.4% zinc and 1.9% lead after depletion. The drill
spacing for the definition of proven reserves was approximately 50 meters by 50 meters while for probable reserves was 100 meters by 100
meters in the open-pit.
The Rampura Agucha open-pit mine was commissioned in 1991 by HZL and operated as a state-owned enterprise until 2002 when HZL
was acquired by us. The low strip ratio and good ore minerology of the mine provide a high metal recovery ratio and a low overall cost of
production for zinc concentrate extracted from the mine. An on-site concentrator is used to produce zinc and lead concentrates which are
shipped mainly to HZL’s smelters though surplus concentrates are exported through the port of Kandla. The mining and processing facilities
are modern and in good condition.
In fiscal 2009, 5.0 million tons of ore at 13.1% zinc and 1.9% lead were mined from Rampura Agucha, which produced 1.1 million tons of
zinc concentrate at 53.1% zinc and 92,151 tons of lead concentrate at 61.8% lead and 834 grams per ton silver. Approximately 36,023,393 tons
of waste were removed giving a strip ratio of 7.27 tons of waste per ton of ore mined. Approximately 92.0% of the zinc was recovered to the
zinc concentrate, while 60.6% of the lead and 63.0% of the silver was recovered from the lead concentrate.
The 12-square kilometers mining lease was granted by the State Government of Rajasthan and runs until March 2020. Mining leases are
governed in accordance with the Mineral Concession Rules 1960 and the Mineral Conservation and Development Rules, 1988. We have also
obtained consents under various environmental laws to operate the mine. We recently applied for a new prospecting permit covering the
surrounding area as the ore body is dipping towards the eastern limit of the mining lease and the deepest intersection is approaching the current
leasehold boundary. HZL commenced production at the mine in 1991. Since then, approximately 35 million tons of ore, with an ore grade of
12.8% zinc and 1.9% lead, respectively, have been extracted from the open-pit mine.
Power is supplied from two 154 MW and 80 MW captive power plants at Chanderiya with two backup 5 MW generators on-site and a 14.5
MW captive power plant that was transferred from Debari in March 2009. Water to the site is pumped 57 kilometers from radial wells in the
Banas River. A water extraction permit has been granted, which provides sufficient water for a production rate of approximately 5.0 million
tpa.
The gross book value of the Rampura Agucha mine’s fixed assets and mining equipment was approximately Rs. 7,793 million
($153.2 million) as of March 31, 2009.
HZL estimates the remaining mine life at Rampura Agucha based on reserves as of March 31, 2009 and current and anticipated production
to be over 20 years from April 1, 2009. In 2004, HZL commissioned the first exploration program since the mine opened and since then have
increased the reserves at Rampura Agucha by approximately 69% after depletion. HZL also believes that additional mineralization exists in an
extension in the depth and breadth of the established resource boundary and exploration drilling is continuing to evaluate the potential of this
deeper mineralization.
An economic feasibility study was carried out in September 2008 based on an industry standard Lerch Grossman open-pit optimization
algorithm using Whittle software 4X. The treatment charges considered were $270 per ton of zinc concentrate and $210 per ton of lead
concentrate. A dilution factor of 3% and a mining recovery factor of 96% were also applied.
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