Supreme Court puts a pause on Vedanta's plan to reopen Sterlite Copper's Tuticorin plant

Supreme Court puts a pause on Vedanta's plan to reopen Sterlite Copper's Tuticorin plant

The top court set aside the National Green Tribunal's overturning the state government's decision to close the Sterlite Copper's Tuticorin plant, but allows parent firm Vedanta the option to move High Court.

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Sterlite Copper's plans to restart its 400,000 metric tons a year copper smelter at Tuticorin - which was at the centre of massive protests over pollution concerns - faced another setback today after the Supreme Court today set aside the National Green Tribunal (NGT) order to that end.

The court was hearing a plea by Vedanta Group seeking a direction to Tamil Nadu Pollution Control Board (TNPCB) to implement the NGT's December 15 order overturning the state government's decision to close the plant. The mining mogul Anil Agarwal owned Group's hopes had been fanned last month when the apex court refused to stay the tribunal's order.

But today, a bench headed by Justice R.F. Nariman ruled that the NGT has no jurisdiction to order reopening of the plant. It also said it is allowing the state's appeal against the NGT order only on grounds of maintainability. However, it granted Vedanta the liberty to approach the high court.

The company will now approach the High Court in Tamil Nadu for an "urgent hearing" as early as possible, P. Ramnath, chief executive officer of the copper unit, told The Print. "We have to get the actual details in it and based on that we will plan our next course of action," he added.

Vedanta has been facing increasing flak from the government and local communities for flouting environmental norms over the past few years. Its anti-green image took the latest hit in May 2018 after protests in Tuticorin - demanding closure of the local plant on water pollution grounds - claimed 13 lives. Six days later, on May 28, 2018, the Tamil Nadu government had ordered TNPCB to seal and 'permanently' close the plant.

The NGT had subsequently set aside the state government's order calling it "non-sustainable" and "unjustified", while the state moved the top court, saying the NGT had "erroneously" set aside various orders passed by the TNPCB last year with regard to the Sterlite plant. It had said the tribunal had directed the TNPCB to pass fresh orders of renewal of consent and issue authorisation to handle hazardous substances to Vedanta Limited.

According to Care Ratings, the closure of the Tuticorin smelter had resulted in a steep fall of over 42% in domestic refined copper production during the first half of the current fiscal. This, in turn, led to the domino effect of a sharp increase in the country's imports and fall in the exports thus turning India into a net importer of refined copper from being a net exporter. "Exports have fallen by 93.6%, whereas imports have increased by 167.9%," it added.

Hence, the top court's ruling today means that India will continue to be a net importer and the continued reduction in the copper production capacity may push up prices. In fact, copper on the London Metal Exchange reportedly rose as much as 1.1% to $6,258 a ton after the verdict. Should the Tuticorin smelter shut down permanently, Care Ratings predicts a close to 61% dip in domestic copper production against the FY18 level of production (843 KT).

(Edited by Sushmita Choudhury Agarwal)

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