Vedanta’s copper smelter in Tuticorin and its torments

Does the Vedanta group sell the Sterlite Copper refinery in Thoothukudi?

Yes, the Vedanta Group has decided to sell its plant in the port city of Thoothukudi in southern Tamil Nadu. In connection with Axis Capital, the company has issued an Expression of Interest (EoI) for the sale. The last day for submitting bids is July 4. The sale includes the smelting complex (primary and secondary); sulfuric acid plant; copper refinery; an oxygen-generating unit and a residential complex with amenities, says EoI. The Tuticorin plant has played an integral role in India, “achieving self-sufficiency with honey”. In the best interests of the country and the Tamils, options are being explored to ensure that the plant and assets are best used to meet growing demand, the company said.

Why this sudden move?

Although Vedanta’s move to sell the unit surprised many, it was an unequal journey for Sterlite since entering Tamil Nadu in 1994. He was accused of polluting the environment and the factory was closed several times. Each time he had to seek legal redress in order to resume his activities. In fact, the Supreme Court had once fined the company 100 rupees for violating the rules, but allowed it to reopen the plant.

The company, for its part, claims that the smelter is one of the safest. The conversion of SO2 to SO3 in the sulfuric acid plant is 99.9 percent, the second best in the world. The plant has adopted all international standards and uses the right technology. The company blamed “external forces” opposed to enlargement for creating problems.

Over the last decade, the company has been fighting a losing battle with strong opposition not only from the people but also from the state government – interestingly, the DMK and AIADMK governments are on the same page once again in opposition to reopening the plant. The move to sell the plant could be due to various convictions against it, as well as a lack of support from local authorities and people.

What is the status of the group’s legal challenge against the closure of the unit?

The case is in the Supreme Court, which is yet to hear a lawsuit filed by natural resources company Vedanta Ltd against the refusal of the Madras Supreme Court in August 2020 to reopen the sterlet honey smelting plant. The lawsuit in the Madras Supreme Court was over the closure of the plant due to protests in Thoothukudi after the company received approval to double its smelting capacity to 8 lakh tons. The court recently gave a one-month notice to the Tamil Nadu Pollution Control Council on a PIL petition seeking to order the demolition of the Sterlite copper smelter.

What was Sterlite Copper’s contribution at work

Until the closure of the plant in May 2018, it accounted for almost 40% of India’s demand for honey and contributed around Rs 2,500 crore to the treasury. It also provided 12% of the revenue of the port of Thoothukudi and had a 95% market share for sulfuric acid in Tamil Nadu. It is important that the plant provides direct employment to 5,000 people and another 25,000 indirectly through the value chain.

After investing more than 3,000 crore rupees in the plant, the company lost more than 4,000 crore rupees after it was shut down. The plant has an installed capacity of 400,000 mtpa integrated smelter and copper refinery, with another 400,000 mtpa under expansion. The plant’s facilities include a refinery, a copper rod plant, a 160 MW power plant, a sulfuric acid plant (with technology from Chernetics, Canada) and phosphoric acid.

Posted on

June 20, 2022

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