Vedanta says, enough of copper business
After a 4 year battle trying to revive the operations at the Copper plant in Thoothukudi in Tamil Nadu, it looks like Anil Agarwal had decided to throw in the towel. Vedanta has put on sale its Sterlite copper smelting plant at Thoothukudi in Tamil Nadu and has already invited expression of interest (EOI) from potential buyers. It may be recollected that the plant is lying shut since May 2018 when police firing during the protests had led to the death of 13 people and left more than hundreds injured. Many felt the firing was totally uncalled for.
The Sterlite plant had bene facing protests over the environment repercussions for some time. However, things came to a head when Sterlite Copper decided to hike the copper smelting capacity from 4 lakh tonnes per annum to 8 lakhs tonnes per annum. After the protests and the casualties, the Tamil Nadu government shut the plant over environment concerns. Several efforts by the company to reopen the plant and despite constant lobbying with the central government, Vedanta has been facing hurdles. It is now very likely that Vedanta would set up a new plant in some other state, instead of in Tamil Nadu.
According to a Vedanta statement, the EOI is being invited in conjunction with Axis Capital and it has fixed 04th July as the last day to submit bids. Vedanta also highlighted the importance of the copper plant adding that the Thoothukudi plant was a national asset, catering to 40% of the national demand for copper. It is also true that the closure had badly impacted India’s efforts towards self-sufficiency in copper. Over the last few years, India has moved from being a net exporter of copper to a net importer of copper.
The EOI includes the smelter complex (primary and secondary), sulphuric acid plant, copper refinery, continuous copper rod plant, phosphoric acid plant, effluent treatment plant, captive power plant and RO units. The overall EOI also includes an oxygen generation unit as well as a residential complex as part of the site. Interestingly, the copper plant of Vedanta contributes Rs.2,500 crore to the government treasury and accounts for nearly 12% of the port revenues of Thoothukudi. It also employs 5,000 directly and 25,000 indirectly.
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According to Vedanta, the plant meets the highest environment standards compared to global peers and hence most of the protests and the closure were uncalled for. Vedanta is a multi-locational plant across various countries and adhering to global rules and standards. It was the key to meeting the growing domestic demand of copper as well as India’s commitment to a green economy. The renewable energy sector and the manufacture of electrical vehicles require abundant quantities of copper.
Vedanta challenged the closure of the plant in the Madras High Court. Unfortunately, the court refused reopening the plant and consequently an appeal against the High Court order is currently pending in the Supreme Court. Vedanta has also stated that it had already Rs.3,000 crore in the copper plant and had lost close to Rs.4,000 crore since its shutdown. Above all, the way the shutdown was handled and the impact it had on the economy, does leaves a lot of foreign direct investors doubting plans to go aggressive in India.
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