Closure of copper plant without valid reason will hurt investments, jobs in Tamil Nadu: Sterlite CEO

Bengaluru: Sterlite Copper, a unit of billionaire Anil Agarwal’s Vedanta group, on Wednesday said that the state of Tamil Nadu will lose out on investments and job opportunities after its decision to shut down the company’s smelting facility in Thoothukudi was upheld by the Madras High Court.

“I don’t think many investors are looking at Tamil Nadu today. This kind of judgment or sudden closure of the plant without any valid reason leaves a very bad taste in the mouth,” Pankaj Kumar, CEO, Sterlite Copper said in an interview on Wednesday.

The Madras HC on Tuesday upheld the 28 May 2018 decision of the Tamil Nadu government to close down the copper smelting plant of Vedanta over allegations of polluting the environment in Thoothukudi, a port town about 610 kms from Chennai.

The court upheld the importance of environmental concerns over economic considerations. The judgement is also likely to have far-reaching consequences on corporate interests across the country and bolster the fight of green activists who have been demanding stricter compliance of environment laws.

Prime Minister Narendra Modi-led centre and other state governments have been rolling out the red carpet to investors by amending industrial, land and labour laws and assuring speedy clearances for projects that may now also be impacted, analysts say.

Kumar said that the weak government in the state had not done enough to check the anti-national forces and people with vested interests, who rallied against the plant for over 25 years, and had scuttled India’s opportunity to be self-reliant in copper production.

He said that the company could have done better when the protests were revived when Sterlite announced its expansion in February 2018.

He said that the protests were against the expansion plans and not the existing plant and the government’s ‘knee jerk’ reaction had caused the problem.

The company said that India had become an importer of copper after 18 years. Sterlite added that the country is now shelling out ₹14000 crores in forex to import copper which would have otherwise been produced by the company domestically.

Kumar said that over ₹3000 crores have been invested in setting up the Thoothukudi plant and the expansion with an additional capital of ₹2500 crore would have put the port town on the global map as it would become one of the largest copper producers with a capacity of one million tonnes.

Kumar said that the company is witnessing a loss of ₹5 crore per day and the lack of maintenance is turning into a bigger problem with each passing day.

Sterlite contributed to about 7% of its parent Vedanta’s top line and the closure has impacted at least 5000 of its direct workers and thousands more dependent on the company, he said.

Kumar added that Sterlite contributed around ₹600 crore for logistics, services and material purchases each year that helped the local economy of the port town as well.