Friday, June 24, 2022

Vedanta puts shut Tuticorin plant for sale

Vedanta Ltd has put on sale its copper smelter plant in Tuticorin in Tamil Nadu, which was shut four years ago after 13 people were killed in a police firing

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New Delhi: Mining mogul Anil Agarwal’s Vedanta Ltd has put on sale its copper smelter plant in Tuticorin in Tamil Nadu, which was shut four years ago after 13 people were killed in a police firing on protestors agitating against alleged pollution by the unit. In newspaper advertisements that appeared on Monday, the company sought initial bids, called an Expression of Interest (EoI), for the plant having capacity to produce 400,000 tonnes a year by July 4. Axis Capital is helping the firm with the transaction.

The Tamil Nadu government had ordered the permanent closure of the unit in the port city of Thoothukudi in May 2018 following violent protests.

The company had in past repeatedly denied allegations of its plant polluting the local environment and had moved the Supreme Court for the opening of the unit.

But the apex court had so far not given a clear go-ahead.

A company spokesperson said the Tuticorin plant is a national asset that has been catering to 40 per cent of the domestic demand for copper and has played an integral role in the country’s self-sufficiency in copper.

“In the best interest of the country and the people of Tamil Nadu, we are exploring options to make sure that the plant and the assets are best utilised to meet the growing demand of the nation,” the spokesperson said.

In the advertisement, the company said the Tuticorin plant, operated by its subsidiary Sterlite Copper, produced about 40 per cent of India’s demand for copper and gave direct employment to 5,000 people and indirect jobs to another 25,000.

“Sterlite Copper, a unit of Vedanta, has a world-class and zero-discharge plant at Tuticorin with the world’s best technology and an installed capacity of 400,000 tonnes per annum of integrated copper smelter and refinery, with another 400,000 tonnes under expansion,” it said.

Vedanta said the copper plant and associated units such as copper refinery, smelter complex, captive power plant, RO units, oxygen generation unit and residential complex with amenities will be sold.

It remains to be seen if any company will express interest to buy the plant and operate it as the state government remains opposed to its restart.

“The plant produces approx 40 per cent of India’s demand for copper, and contributes around Rs 2,500 crore to exchequer, 12 per cent of Thoothukudi port’s revenue, 95 per cent market share for sulphuric acid in Tamil Nadu, direct employment to 5,000 people and another 25,000 indirectly through the value chain,” it said.

Tuticorin joins the list of projects that companies shelved following local protests. In 2005, Posco, the world’s fourth-largest steelmaker, announced a USD 12-billion investment in setting up a 12-million-tonne-capacity steel project in Jagatsinghpur district in Odisha but shelved it in 2017 as the project made no progress because of local resistance.

Sajjan Jindal-led JSW Utkal Steel Ltd decided to take up the project but it too has faced resistance from locals.

Vedanta had in past blamed non-governmental organisations for the shutdown of its copper plant, saying a prolonged closure would quadruple India’s copper imports as buyers move to secure supplies.

Vedanta’s shares plunged 12.67 per cent to close at Rs 230.25 on the BSE.

The firm had been scouting for locations to set up a new copper smelter to replace the shuttered unit. It had sought EoIs from state governments of coastal states to partner with it for setting up a 500,000 tons-a-year copper smelter complex at a potential investment of around Rs 10,000 crore.

It wanted about 1,000 acres of land close to a port along with logistics connectivity for the project.

But the status of that hunt is not known.

The Tamil Nadu government had last year allowed Vedanta’s sealed Sterlite copper plant in Thoothukudi to operate for the production of medical oxygen in view of the depleting oxygen reserves amid the massive spread of the COVID-19 cases.

While granting the permission, the state government had asked the Sterlite plant not to be involved in the production of copper or any other material.

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