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Friday, September 18, 2020

Tuticorin plant shut, production hit, India now net importer of copper

As a result of the closure of the plant, which contributed over a third of the country’s annual refined copper capacity, India’s copper production fell by 40 per cent — to 4.57 lakh tonnes — in 2018-19.

Written by Pranav Mukul , Aashish Aryan | New Delhi | Updated: August 19, 2020 7:02:58 am
Vedanta’s unit Sterlite Industries, which owns the plant in Tuticorin, produced 4.08 lakh tonnes of copper in 2017-18, which dropped to 89,700 tonnes in 2018-19 following the closure, according to a note by CARE Ratings. (File)

The 2018 shutdown of Vedanta Limited’s copper plant in Tuticorin, which is set to continue with the Madras High Court declining to allow the company to reopen the unit, has badly dented India’s copper production and turned the country into a net importer of copper since FY 2019.

As a result of the closure of the plant, which contributed over a third of the country’s annual refined copper capacity, India’s copper production fell by 40 per cent — to 4.57 lakh tonnes — in 2018-19. This, in turn, turned India into a net importer of copper in 2018-19, as against the country exporting half of its total production of the metal in 2017-18.

Read | Vedanta lost $200 million in profits in one year of Tuticorin plant shutdown: Chairman

Vedanta’s unit Sterlite Industries, which owns the plant in Tuticorin, produced 4.08 lakh tonnes of copper in 2017-18, which dropped to 89,700 tonnes in 2018-19 following the closure, according to a note by CARE Ratings. The impact was also seen on around 800 small and medium units manufacturing cables, winding wires and transformers that sourced their raw material from the Tuticorin unit.

The Tuticorin copper smelting plant has been shut since March 2018. Initially closed for scheduled maintenance activities, the plant could never reopen, as the Tamil Nadu Pollution Control Board rejected the company’s demand to renew the consent to operate.

In June 2019, Vedanta Group chairman Anil Agarwal had said that the listed Indian entity, Vedanta Ltd, had lost nearly $200 million in profits since it was shut 15 months before. He had said that 20,000 direct and indirect jobs were lost due to shutting of the smelter, and about 98,400 more people were affected in the consumer or downstream industries.

Read | Sterlite moves Madras High Court for reopening its copper unit in TN

In its annual statement for 2017-18, the company had said that it would continue its Tuticorin plant expansion by 4 lakh tonnes per annum to become “one of the world’s largest single-location copper smelters” by 2019-20. The company had then also hinged its hopes on a fall in production at Latin American mines due to renegotiation of labour contracts at Chilean and Peruvian copper mines.

“Our smelter capacity expansion projects in Tuticorin will enable us to take advantage of these opportunities and respond to the increased demand,” the company had then said in its annual statement.

Read | No Supreme Court relief for Sterlite Tamil Nadu plant; Vedanta can move High Court

However, in its statements a year later, the company changed its stance. The plant, which held a 33-per cent market share of the country’s refined copper demand of around 6,75,000 tonnes, was then shut on the orders of the state government.

The AV Birla Group-owned Hindalco Industries and state-owned Hindustan Copper are the other major copper producers in the country.

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