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

The gross book value of the Rajpura Dariba mine’s fixed assets and mining equipment was approximately Rs. 2,149 million ($42.2 million)
as of March 31, 2009.
HZL estimates the remaining life of the mine based on reserves as of March 31, 2009 and current production to be approximately 13 years
from April 1, 2009. An exploration program is also underway to identify new resources with the potential to be upgraded to reserves, and has
been and continues to be focused on maintaining the reserve position after annual mining depletion. The drill spacing for proven reserves was
some 30 meters while for probable reserves was less than 60 meters.
The average grade for each individual stope was defined using standard parameters for internal waste and dilution and a geological cut-off
grade of 3% combined lead and zinc, though the mineralization generally has a sharp natural contact. The economic cut-off grade was then
calculated based on a zinc price of $1,000 per ton and a lead price of $700 per ton, treatment charges of $130 per ton for zinc concentrate and
$140 per ton for lead concentrate and fiscal 2006 cost and performance levels. The in-situ quantities and qualities were adjusted by applying a
mining loss factor of 10%, a dilution factor of between 12% and 20% depending on ground conditions, with a further grade adjustment of
(0.2)% for lead, (0.3)% for zinc and five grams per ton silver. These parameters are based on a reconciliation of historical production. This
analysis showed that at these prices the diluted in-situ cut-off grade should be 5.4% combined lead and zinc. Stopes with average grades below
this economic cut-off grade were excluded from the reserve estimate. The final reserve estimate is the sum of the stopes with an average grade
above the economic cut-off limit. As the stopes are all accessed using the existing infrastructure and as there is sufficient capacity on the
tailings dam, the capital expenditure was limited to the replacement of mining equipment and was therefore considered not to have a material
impact on the cut-off grade.
The latest addition to the Rajpura Dariba mining operation is the Sindesar Khurd underground mine deposit that was explored during the
years 1992 to 1995. Mine production began at the Sindesar Khurd mine in April 2006 and HZL’s mining permit is valid until 2029.
The Sindesar Khurd mine is a small scale underground mine. The deposit lies five kilometers north of and is on the same geological belt as
the Rajpura Dariba mine. Ore from the mine is fed to the Rajpura Dariba mill and processing plant. The two mines are connected by allweather
tar road. The proven and probable reserves for the Sindesar Khurd mine as of March 31, 2009 of 6.39 million tons at 5.31% zinc and
2.76% lead are quoted in the figures for Rajpura Dariba.
The Sindesar Khurd ore body is conformable with the host stratigraphy. The mineralization lies within silicified dolomite and graphite mica
schist which are overlain by quartzite. The deposit has been drilled to a depth of approximately 800 meters below surface and the ore body is
traced over approximately two kilometers along the strike with an 800 meters vertical extension. While the deposit is still open in depth in the
southern extension of the present mine block, the area below the mine block and towards the north extension only has narrow and low to
moderate grade mineralization intersected.
Access to the mine is through an incline shaft and ramp from the surface while ore is hauled up the inclined shaft through the ramp. The ore
body is accessed via horizontal drives on three levels. The long-hole open stoping mining method is used.
Exploration at the south part of Sindesar Khurd has been ongoing since March 2005 with a drilling program aimed at increasing the size of
the resource. As of March 31, 2008, a total of 45 holes have been drilled, the deepest being 700 meters below surface.
The actual production achieved by the Rajpura Dariba mines, which includes the Sindesar Khurd mine, in fiscal 2009 was 783,288 tons of
ore at 4.9% zinc and 1.8% lead ore mined to produce 59,671 tons of zinc concentrate at 47.4% zinc, 17,744 tons of lead concentrate at 52.0%
lead and 2,837 grams per ton of silver and 8,687 tons of bulk concentrate with 38.1% zinc and 11.2% lead, with 81.8% of the zinc being
recovered in the zinc concentrate and 74.3% of the lead and 61.9% of the silver being recovered in the lead concentrate.
In fiscal 2009, 16,013 dmt of zinc concentrate at a grade of 46.5% was sold to third parties from the Rajpura Dariba mines. The revenue
realized from zinc concentrate sales was Rs. 324 million ($6.4 million). In fiscal 2009, 24,075 dmt of lead concentrate at a grade of 52.5% was
sold to third parties from the Rajpura Dariba mines. The revenue realized from lead concentrate sales was Rs. 1,924 million ($37.8 million).
Zawar
Zawar consists of four separate mines, Baroi, Zawarmala, Mochia and Balaria. The deposit is located approximately 60 kilometers south of
the city of Udaipur in the district of Udaipur in Rajasthan, in northwestern India. It is accessed by paved road from Udaipur in the north and
Ahmedabad, the capital of the State of Gujarat, to the south. All of the deposits lie within a 36.2 square kilometers
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