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Sterlite's copper smelter to stay shut, case shifts to Delhi

The Tuticorin smelter produces nearly 30,000 tonnes of copper every month. The closure has sent refining costs soaring as the Sterlite plant met half of India's copper needs.

Sterlite Industries' hope of a swift reopening of its copper smelter at Tuticorin - which is also India's largest - was belied on Monday when the southern bench of the National Green Tribunal transferred the case to New Delhi without offering any clear reason. Judge M. Chockalingam in his brief order said circumstances did not permit hearing the case in Chennai.
 
He had earlier constituted a team of experts to study the plant and give the court a report. The report was duly submitted. But now the sealed report will be sent to New Delhi. The case, it appears, will now be heard all over again.
 
Sterlite, part of the Anil Agarwal-owned Vedanta group, was hoping it would be allowed to reopen the plant. A senior official has been quoted by wire agencies as saying the company was disappointed. The plant has been shut since March 30 after residents in the area complained to the Tamil Nadu Pollution Board of high emissions and resultant breathing problems. The company has denied any excess emission and attributes the high emission reading to recalibration of equipment during routine maintenance.
 
The smelter produces close to 30,000 tonnes of copper every month. Its closure has led to 90,000 tonnes of copper concentrate hitting the open market, thus pulling down its prices. At the same time, the closure has sent copper refining costs soaring as the Sterlite plant met half of India's copper needs.
 
The market had expected the court to allow reopening of the smelter with some conditions, more so after the Supreme Court refused to endorse a Madras High Court order which wanted to shut the plant down permanently for environmental reasons. Instead, the Supreme Court chose to fine the Vedanta group company Rs 100 crore.
 
The company last year made a profit of a little over Rs 1,600 crore.
 
Interestingly, the court's move to transfer the case to New Delhi had little effect on the company's share price. The stock remained steady at around Rs 90 despite the continuing uncertainty. The market's response, according to analysts, indicates that it still expects the smelter to reopen soon.
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