The industry bodies said that the closure of the plant has caused supply disruptions, leading to a rise in imports and increased cost of production
In May 2018, the state government had ordered the pollution control board to seal and permanently close the plant
Copper end-user industry bodies have urged the Tamil Nadu government to "work out a solution" to restart operations at Sterlite Copper plant in Tuticorin, which catered to around 40 per cent of India's total requirement of the metal.
The industry bodies, whose members constitute SME and MSME units, told PTI that the closure of the plant has caused supply disruptions, leading to a rise in imports and increased cost of production.
In May 2018, the state government had ordered the pollution control board to seal and "permanently" close the plant, following violent protests over pollution concerns.
Sterlite Copper later moved the Supreme Court to resolve the issue, where the matter is pending.
Anil Saboo, President of the Indian Electrical & Electronics Manufacturers' Association (IEEMA), said copper is a major component used by the players of this industry and the plant used to cater around 35-40 per cent of the country's total copper requirement.
"The electrical equipment industry is suffering a lot because of it. Prices of copper have risen by 30-40 per cent in the last few months and fixed-rate contracts of electrical equipment makers with government or private are being affected. It has affected their cash flow also and their profitable orders are converting into losses," he said.
As per industry data, India's refined copper production was about 8,48,000 tonne in 2017-18, while the exports stood over 4,16,000 tonne and imports were at 2,15,000 tonne.
In 2019-20, the country's production of refined copper reduced to 4,08,000 tonne, and exports fell to 29,000 tonne, while imports rose to 3,45,000 tonne.
Muthuraj Raveendran, President of the Compressor Component Suppliers Associations (CCSA), said industries in the state started functioning from June 2020 after the lockdown. Since then, copper prices have been going up. Particularly since October, the prices have surged to ₹500 to 600 per kg of copper.
"Now, it is around ₹735 per kg of copper, almost 50 per cent price hike. Earlier, if we consider the manufacturing costs of motors, copper would contribute around less than 20 per cent of the total cost. Now, due to recent price hikes, it contributes to about 33 per cent of the total cost," Raveendran said.
G Krithika, Vice President of Coimbatore Compressor Industries Association (COCIA), has also requested the Tamil Nadu government to work out a solution to restart the plant. There are lots of associations related to pumps and motors. Everyone has been significantly impacted.
"I request the government to intervene, form a committee and understand our problems too and bring out a workable solution," she added.
Railway Suppliers Association (RASA) in a representation to the Tamil Nadu government recently said during February alone, the price has increased by 21 per cent.
The association apprised the government that the copper price is expected to reach a level of USD 12,000 per tonne, which means the basic copper price in India will be as high as ₹1,000 per kg.
"We request the Tamil Nadu government to reconsider its decision to permanently shut down Sterlite Tuticorin Plant. Without compromising environment safety and public health, the government may stipulate strict safety provisions through an expert committee, (on the Sterlite management) before re-commissioning.
"The increase in indigenous copper production will at least shield the small industries, from the further price increase," RASA said. PTI ABI BAL BAL
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