Vedanta Copper Unit to Remain Shuttered Boosting India Imports
(Bloomberg) -- Vedanta Ltd., controlled by billionaire Anil Agarwal, suffered a blow after a top court stalled the resumption of operations at its Indian copper smelter, dashing hopes of a recovery in the nation’s production and forcing consumers to continue to rely on imports. Copper prices climbed in London.
The Supreme Court on Monday overturned the green tribunal’s order in December to restart the 400,000 metric tons a year copper smelter in the southern state of Tamil Nadu, saying the National Green Tribunal doesn’t have the jurisdiction to decide on the matter. It said the company can approach the state high court for restarting the plant.
Copper on the London Metal Exchange rose as much as 1.1 percent to $6,258 a ton Monday after the verdict. Shares of Vedanta, which earlier rose as much as 2.7 percent to 151.20 rupees, pared gains to close at 148 rupees in Mumbai.
Vedanta will approach the high court in Tamil Nadu for an “urgent hearing” as early as possible, P. Ramnath, chief executive officer of the copper unit, said in a phone interview. “We have to get the actual details in it and based on that we will plan our next course of action.”
The Mumbai-based company had stopped operations for maintenance in March and later extended the closure in the face of mounting opposition from villagers against pollution caused by the plant. The state government shuttered the smelter in May after 13 people died when police opened fire on protesting villagers.
Monday’s decision by the Supreme Court follows a hearing last month when judges said they were inclined to allow Vedanta to restart the unit immediately with certain conditions, but agreed to hear those who opposed the plant before giving the order.
The latest decision from the top court delays the resumption of production further and may aid a spike in global prices as it means a reduction of 40 percent of the country’s capacity, according to Care Ratings Ltd.
“We had expected the plant to restart by March and be fully operational by April from initial indications from the courts,” Urvisha Jagasheth, an analyst at Care Ratings, said by phone. “India’s output will continue to be depressed and we will remain a net importer.”
During April-November, India imported 66,560 tons of of refined copper and alloys, a 112 percent jump from the year-ago period, according to the nation’s trade ministry.
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