Vedanta Rallies as Tribunal Orders Indian Copper Smelter Restart
(Bloomberg) -- Shares of billionaire Anil Agarwal’s Vedanta Ltd. surged in Mumbai after the country’s National Green Tribunal said the company could restart its copper smelter that accounts for nearly half of India’s output.
- Vedanta’s shares rose as much as 6.3 percent in Mumbai on Monday, paring losses to 37 percent this year, after the tribunal on Saturday quashed the Tamil Nadu state government’s order to shut the 400,000 tons a year smelter.
- The tribunal ordered the state pollution board to approve the plant’s restart within three weeks. The tribunal has also directed Vedanta to spend 1 billion rupees ($14 million) on community welfare over three years and implement pollution control and monitoring mechanisms.
- The ruling was in line with the recommendations of a panel set up to give its opinion on the smelter. The panel said last month that the closure of the copper plant by the state government wasn’t justified and was “against the principles of natural justice.”
- Vedanta halted its smelter in Tuticorin for maintenance in late March. In May, the Tamil Nadu government shuttered the facility after 13 people died when police opened fire on villagers protesting the pollution caused by the plant.
- The state government will approach the Supreme Court to challenge the tribunal’s verdict, the New Indian Express newspaper reported, citing Tamil Nadu’s chief minister.
- The restart will be positive for the stock in the near-term and will add 4 percent to the next fiscal year’s pre-tax earnings estimate, Morgan Stanley analysts including Ashish Jain said in a Dec. 16 report.
- India’s copper output will rise to 410,000 tons by the end of March, higher than an earlier estimate of 331,000 tons, once the plant reopens, said Urvisha Jagasheth, an analyst at Care Ratings.
- Imports of refined copper are forecast at 160,000 tons this fiscal year from about 40,000 tons during the year-earlier period as the plant was shut for three quarters of the year
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