Vedanta Has Lost $200 Million Since Sterlite Copper Plant Shutdown, Says Anil Agarwal
Vedanta Ltd. has lost about $200 million in profits ever since Sterlite Industries Ltd.‘s copper plant in Thoothukudi, Tamil Nadu, was shut down after protests last year, group chairman Anil Agarwal said on Sunday.
Agarwal claimed the shutdown forced India to import copper, spending precious foreign exchange. "We have lost about $200 million in bottomline (profits)," he said. "Forget about bottomline. How can you stop production and start importing? After all, what we did at Tuticorin was import substitution."
The Tamil Nadu government had in May last year ordered permanent shutdown of the copper smelter after protests at the plant in Thoothukudi culminated in police opening fire on demonstrators.
Vedanta wants the plant reopened, pointing to economic pressures due to the closure. About 20,000 direct and indirect jobs have been lost due to the shutdown and about 98,400 more were affected in consumer or downstream industries, Agarwal claimed.
"It is a bread and butter issue for Tuticorin," he said. "What happened (in police firing) was very unfortunate and our thoughts and sympathies are with the victims. But what is now happening is equally unfortunate."
The Sterlite copper plant in Thoothukudi produced about 40 percent of India's copper output. The company had announced a plan to expand capacity, leading to protests on concerns about pollution. Vedanta denies that the factory has been a polluter.
In an interview with PTI, Agarwal sought to draw a parallel between Thoothukudi and Singur, West Bengal, which was abandoned by Tata Motors in 2008 after protests over its Nano car factory. "Nobody can (afford to) make another Singur," he said, without elaborating.
Tamil Nadu, one of the most industrialised states in India, is home to factories of companies like Hyundai Motor Co. Ltd and Caterpillar Inc. But it has in recent months seen a decline in foreign investment, leading to concerns about job creation.
"I have been saying and will repeat again—the world does not want us to produce. The world wants us to import," Agarwal said and hoped that a solution will be found soon.
According to Vedanta’s latest annual report, the Sterlite copper plant ranks as one of the largest custom copper smelters in India. With a design capacity of 400,000 tonnes, the business held 33 percent market share of the country's refined copper demand of around 675,000 tonnes in FY2018, it said.
The company challenged the closure order through an appeal before the National Green Tribunal, which in Dec. 2018 ruled that the Tamil Nadu government's order was "non-sustainable" and "unjustified". However, in Feb. 2019, the Supreme Court set aside the NGT's order on the grounds of maintainability and directed Vedanta to file a writ petition before the Madras High Court.
The company has filed a petition in the high court and "the matter is likely to come up after the summer vacation break," Agarwal said.
Refined copper is predominantly used in manufacturing cables, transformers and motors as well as castings and alloy-based products.