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    HomeBusinessSterlite Copper: A star-crossed venture, now on the block

    Sterlite Copper: A star-crossed venture, now on the block

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    Companies

    N Madhavan | Chennai, June 20 | Updated on: Jun 20, 2022

    ‘Who will buy this facility after all the legal and political troubles it is embroiled in?’

    Vedanta group’s decision to sell its copper smelter plant (part of Sterlite Copper) at Tuticorin has surprised many. The group is still contesting the Tamil Nadu government’s closure order in 2018 and the matter has reached the Supreme Court.

    The surprise is also about the move itself.

    Who will buy this facility after all the legal and political troubles it is embroiled in? That Madras High Court is even hearing a PIL seeking demolition of the unit. Experts are wondering if this is some sort of pressure tactics that Vedanta group is attempting in a bid to save the project.

    The problems started for this project the moment an agreement was signed in 1994 between Tamil Nadu Government led by the then Chief Minister J Jayalalithaa and the Vedanta Group. The smelter which was originally planned at Ratnagiri in Maharashtra was shifted after protests over pollution concerns.

    Troubled history

    Ever since the smelter started production, charges were flying thick and fast that the company was discharging untreated waste into the open sea and the sulphur-di-oxide levels in the atmosphere was periodically very high.

    Once a few workers in a neighbouring factory fainted and Sterlite Copper was blamed for it and in fact, led to one of its many closures. The facility re-opened only after legal interventions that involved setting up additional facilities to curtail pollution as recommended by the National Environmental Engineering Research Institute (NEERI).

    The company, for its part, has been maintaining that it had followed all norms and all charges are part of an `international conspiracy’ to make India import-dependent on copper and other by-products such as sulphuric acid that the facility produced. Despite its best efforts over almost three decades, the company has not been able to shrug off its image as a polluter or prove the conspiracy.

    In fact, Supreme Court once said that the company was indeed polluting but surprisingly allowed it to re-open the plant after paying a fine of ₹100 crore. These instances only increased the opposition for the plant among environmentalists, activists and local people. When the company got the approval for doubling its smelting capacity to 8-lakh tonnes, all hell broke loose. Massive protests started which finally led to police firing in which a dozen protestors died. The Tamil Nadu government revoked its permission to operate the facility in 2018.

    Import dependency

    Successive State governments have not handled this issue well. They kept extending the permission to operate based on real time pollution data. They also permitted the company to double its capacity but when the protests snowballed, they withdrew the permission and cut-off electricity supply. If Sterlite Copper was indeed a polluter, it should have shut down long back and the country would have been better prepared to meet its copper demand.

    When the facility closed in May 2018, it was contributing to nearly 40 per cent of India’s copper demand. Today, India is a net importer of copper. It also had 95 per cent market share for sulphuric acid in Tamil Nadu. Units in the State are now forced to source it from elsewhere at much higher prices. Thousands have lost their livelihood. The company which had invested ₹3,000 crore in the facility claims to have lost as much as ₹4,000 crore so far. It is not to say that for economic reasons, a polluting company should be allowed to function. But none of the stakeholders have painted themselves in glory in the way they handled this issue.

    Published on June 20, 2022

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