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Business News/ Companies / Tamil Nadu to SC: Vedanta’s Sterlite Copper not a national asset

Tamil Nadu to SC: Vedanta’s Sterlite Copper not a national asset

The state government alleged the company was a repeat offender and polluter, while Vedant favoured the court’s suggestion for a committee to look into prospects for reviving its closed plant

The Tamil Nadu government sealed Vedanta's Sterlite Copper plant in 2018. (Reuters)Premium
The Tamil Nadu government sealed Vedanta's Sterlite Copper plant in 2018. (Reuters)

NEW DELHI : The Tamil Nadu government told the Supreme Court that Vedanta Ltd’s Sterlite Copper plant should not be considered a national asset or deemed necessary to reopen to fulfill the country’s copper demand. 

The state instead pointed to Adani Group’s forthcoming copper smelter plant in Gujarat as capable of fulfilling India’s copper demand.

Since the Sterlite Copper plant in Tamil Nadu’s Thoothukudi city was shut in 2018 following violent protests, India has transitioned from being a net exporter to a net importer of copper. Prior to that, the plant contributed to nearly 40% of India’s copper demand.

Its closure also impacted domestic fertilizer and chemical industries, leading to increased reliance on imports for key raw materials.

The Tamil Nadu government opposed granting Vedanta any opportunity to reopen its plant in Thoothukudi, alleging that the company was a repeat offender and polluter.

The state argued there had been no loss to the regional economy due to the closure of the plant, pointing out that Thoothukudi is emerging as a new hub for the automobile industry. 

The local population also does not want the plant to reopen, Tamil Nadu government’s legal representatives told the Supreme Court.

These remarks were made on Wednesday during Vedanta’s appeal against the closure of the plant by the Tamil Nadu government, before a 3-judge bench led by Chief Justice D.Y. Chandrachud.

The state government also objected to the Supreme Court’s suggestion for a committee to examine prospects for reviving the closed Vedanta plant. Senior lawyer C. S. Vaidyanathan, representing the Tamil Nadu government, argued that the Madras High Court had already ruled to keep the Vedanta plant shut after considering various expert committees and suggestions. 

He stressed that only the Supreme Court could overturn the High Court’s verdict through its order, and not through an expert committee report.

In contrast, Vedanta submitted a note to the apex court expressing its agreement with the suggestion for forming a committee to look into its Thoothukudi plant’s future. 

The company proposed that the committee include representatives from the Union ministry of environment, forest and climate change, the National Environmental Engineering Research Institute, the Central Pollution Control Board, the Indian Institute of Technology, the Tamil Nadu Pollution Control Board, a representative from Vedanta, and three independent experts. 

Additionally, Vedanta recommended that a retired judge of the Supreme Court chair the committee, also suggesting that the committee submit its report in a month.

According to Vedanta, the committee should provide recommendations and suggest conditions for the resumption of operations at its copper smelter plant. The committee may also propose additional environmental safeguards if necessary, it said. 

Vedanta has expressed willingness to cover the expenses likely to be incurred by the committee and to cooperate in implementing any orders from the Supreme Court. The company has requested that the case be adjourned until the committee’s report is presented to the Supreme Court.

The Supreme Court, however, made it clear that it couldn’t straightaway allow Vedanta to operate the plant without thorough inspection, as it has a responsibility to the people of the region, who need protection in any foreseeable situation that may arise after the immediate opening of the plant. 

The court suggested that Vedanta may conduct refurbishment of the closed plant subject to the conditions imposed by the committee for compliance with environmental rules for the copper smelter industry. 

The hearing in the case is likely to continue tomorrow.

Ever since the Tamil Nadu government sealed the Sterlite Copper plant in 2018 after seeking advice from the Tamil Nadu Pollution Control Board, Vedanta has been striving to have it reopened. 

Trouble for the plant began with opposition from local fishermen concerned about pollution affecting their livelihoods. Legal battles ensued, including a closure order from the Madras High Court in 2010, which was later stayed by the Supreme Court. 

The company faced further challenges after a sulfur dioxide leak in 2013 and violent protests in 2018, leading to the plant’s closure by the Tamil Nadu government.

In 2020, Vedanta Group announced that the Thoothukudi plant was up for sale.

The Gautam Adani-led Adani Group is building a single-location copper manufacturing plant at Mundra in Gujarat. The $1.2-billion facility will start its first phase of operations by the end of March, and is expected to achieve full-scale 1-million tonne capacity by the end of FY29. 

The Adani plant is likely to reduce the country’s dependence on imports.

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Krishna Yadav
Krishna, a lawyer turned journalist, is a key member of Mint's corporate team. He covers major legal battles in Delhi's courtrooms, with a focus on finance, markets, and policy. Additionally, he crafts easy-to-understand explainers for complex stories and holds a PG Diploma from the renowned Asian College of Journalism.
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Published: 21 Feb 2024, 06:56 PM IST
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