The story so far: In the last four years, teams from Sterlite Copper, a part of the Vedanta Group have been running around to get its legal issues fixed in order to re-open its plant at Thoothukudi which was closed in 2018. But now — even as the case is in the Supreme Court— the company suddenly announced that it is selling off the plant, raising eyebrows of the local people, industries, politicians and environmentalists who have been constantly tracking them.
Is the Vedanta Group hiving off its copper plant in Tamil Nadu?
On June 20, the Vedanta Group put out an advertisement which said that Sterlite Copper, Thoothukudi is up for sale. Vedanta, in conjunction with Axis Capital, has invited expression of interest (EOI) for the sale of its copper plant along with its other units, which includes the smelter complex (primary and secondary), sulphuric acid plant and copper refinery among others. The last day for submission of bids is July 4.
Why is the Sterlite copper plant up for sale?
Ever since the plant was sealed in 2018 by the Tamil Nadu government after seeking advice from the Tamil Nadu Pollution Control Board (TNPCB), the company has been running from pillar to post to re-open the plant.
Sterlite Copper has also been incurring a loss of five crore per day since it went under lock and key. During recent interactions the company officials indicated that even if the Supreme Court allowed them to re-open the company, it would need around ₹800 to ₹1,000 crore to revamp the plant. When questioned about the reason for the sale the company issued a statement in which it said that it was exploring options to make sure that the plant and the assets are best utilised to meet the growing copper demands of the nation.
Why was the plant under lock and key?
Trouble starting brewing for the company ever since it set foot in the Pearl city. The first blow for the company came from the fishermen in the region. The fishermen, backed by the Marumalarchi Dravida Munnetra Kazhagam (MDMK) a political party in Tamil Nadu, were worried that the effluents discharged by the plant would pollute the sea which will in turn ruin their livelihoods. In 2010, the Madras High Court ordered immediate closure of the plant for not complying with environmental norms. The Supreme Court later stayed the High Court's order. The company got into troubled waters again in 2013 after a sulphur dioxide leak. But the Supreme Court allowed them to function after the payment of a fine of ₹100 crore for polluting land and water by running the company without approval for a considerable period of time. In 2018, after the company announced that it would be enhancing its capacity, large-scale protests from local and neighbouring localities broke out. On May 22, the protests turned violent and the police open fired which led to the death of 13 civilians. A week later the Tamil Nadu government sealed the plant.
What has the company said about the many allegations against it?
Officials at Sterlite have always emphasised the fact that the plant is equipped with full-fledged air pollution control measures and adequate solid waste management facilities. In the last four years, senior management has stressed that the plant follows Zero Liquid Discharge since inception — all the effluent is treated and recycled back into operations, so that there is no effluent discharge.
They also said that the regulator, TNPCB, carries out regular monthly sampling across all village bore wells and has found no abnormalities. All the allegations have already been dealt with in both the Supreme Court 2013 judgment and the National Green Tribunal 2013 judgment.
What was the impact of the closure of the plant?
India has shifted from being a large net exporter of refined copper to now being a net importer of copper during the last four years since the shutdown of the Tuticorin plant.
According to data provided by Care Ratings, India is now importing copper at a historically higher price close to around $9600 per tonne which is around 50% higher as compared to the average prices of copper when India was a net exporter of the same (around $6500 per tonne). Sterlite was a major domestic supplier of phosphoric acid with a capacity of 2,20,000 metric tonnes, which is a key raw material for fertilizer manufacturing companies. These fertilizer units were impacted due to stoppage of supplies and had to start importing.
While operational, it was the largest supplier of sulphuric acid (used in detergent and chemical industries) in Tamil Nadu, and had a 95% share of the market.
Why was a part of the Sterlite plant allowed to function during the COVID-19 pandemic?
On April 27, 2021, when the second wave of the pandemic was at its peak the Supreme Court granted permission to re-open two oxygen plants at Sterlite Copper’s Thoothukudi plant.
While granting permission a bench comprising of Justices D.Y. Chandrachud, L. Nageswara Rao and S. Ravindra Bhat noted that this was done because of national need and that it does not mean they are favouring the Vedanta Group.
The Tamil Nadu government immediately constituted a seven-member committee headed by the then district collector to oversee proper functioning of the oxygen plants.
