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Vedanta calls copper plant a ‘national asset’, floats EoI for bids; Shares plunge – Moneycontrol

File image of Vedanta’s Sterlite plant in Tuticorin (Image Source: Mongabay)

Vedanta has invited Expression of Interest (EoI) for its Tuticorin-based smelter, which has been shut since mid-2018, following a Tamil Nadu government order. The last day to submit EoI is July 4, and the bids have been invited in conjunction with Axis Capital.

Plant units, including oxygen generation facility as well as residential homes, are also part of the sale offer. The plant has faced closures over alleged violation of environmental norms.

The metals and mining conglomerate has posted an advertisement inviting EoIs by July 4 for the plant, which it said accounted for 40 percent of India’s copper output and employed thousands. At the time of closure, it employed 5,000 people directly, and another 25,000 indirectly.

“The Tuticorin plant is a national asset which has been catering to 40 percent of our national demand of copper and has played an integral role towards India’s self-sufficiency in copper. In the best interest of country and the people of Tamil Nadu, we are exploring options to make sure that the plant and the assets are best utilized to meet growing copper demand of the nation,” Vedanta said in its official statement.

Vedanta has advertised for EoIs in its Tuticorin copper plant Vedanta has advertised for EoIs in its Tuticorin copper plant

Future of Sterlite plant in limbo?

Pressure is mounting on Tamil Nadu Chief Minister MK Stalin to reopen the Sterlite Copper plant as imports mount and prices rise.

Fisherwomen from coastal hamlets in the region have submitted a petition to district collector K Senthil Raj demanding the reopening of the plant, which closed in May 2018 after police firing on protestors demanding its closure left 13 people dead. More such petitions have reached the district collector.

The Thoothukudi Contractors’ Association is also campaigning for the factory to be reopened.

But, to be sure, anti-Sterlite activists, too, have been vociferous in demanding permanent closure of the plant, which its owner Vedanta has claimed provided direct and indirect jobs to around 20,000 people.

Protestors say the plant polluted the environment and harmed the health of residents in its vicinity. The safety of the people living in the region cannot be compromised, said G Stephen, a resident of Thoothukud who once was employed at the plant.

Copper supply, characterised by rising imports and declining exports, is emerging as one of the challenges to Prime Minister Narendra Modi’s vision of an ‘Atmanirbhar Bharat’.

Plant closure pushing copper prices up

In a written response in the Lok Sabha, Minister of Mines, Coal and Parliamentary Affairs Pralhad Joshi informed the House that India’s imports of refined copper had more than tripled between 2017-18 and 2019-20. Exports declined by over 90 percent during the period, he said.

According to Joshi, refined copper imports increased from 44,245 tonnes in 2017-18 to 92,990 tonnes during 2018-19 and 152,000 tonnes in 2019-20. Exports declined from 378,000 tonnes in 2017-18 to 47,917 tonnes in 2018-19 and 36,959 tonnes in 2019-20, he said.

“Consequently, there was a net import of 44,373 tonnes and 115,005 tonnes in 2018-19 and 2019-20, respectively, against net exports of 334,310 tonnes in 2017-18,” the minister said.

Joshi said the closure of the Sterlite Copper Plant in Thoothukudi had affected the domestic production of refined copper. Joshi said copper production in the country, as a result of the Sterlite Copper Plant’s closure, dropped to 410,000 tonnes in 2019-20 from 830,000 tonnes in 2017-18. Refined copper output in 2018-19 was 450,000 tonnes.