Sterlite's Copper Smelter, India’s Biggest, Coming Back Online?

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Almost two months since it was forced to shut down following complaints of a gas leak, an environmental court in India allowed Sterlite Industries (India) Ltd to reopen its copper smelter in Tuticorin in the southern state of Tamil Nadu, pending a final judgment on the fate of the plant.

The Tuticorin plant is India’s biggest copper smelter, and is likely to re-open by the end of this week. The National Green Tribunal’s ruling giving permission to do so, however, came with a rider that a committee will be formed to check its emissions and submit a report.

Mineweb had reported back in April that the copper smelter had been ordered shut by the Tamil Nadu State Pollution Control Board (TNSPCB) after the latter had detected higher-than-normal levels of sulfur dioxide in the area, an allegation countered by the company, which is a unit of London-listed conglomerate Vedanta Resources PLC.

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Sterlite had denied “allegations of leakage,” saying all emissions were within stipulated limits. The smelter had been in operation for over 15 years before it was ordered shut.

For some time after closure, India’s copper producing circles expressed fear of the closure having a major impact on not only domestic copper supply, but Asia’s overall copper supply since Sterlite produces over 300,000 tons of copper per year, which is about 50 percent of India’s total supply.

Sterlite itself had exercised force majeure on purchases of copper concentrates and deliveries of different kinds of copper, a clause in the supply contract that allows a company to miss shipments “due to circumstances beyond its control.” The smelter uses imported concentrates, and over half of production was being exported to China.

But maybe, just maybe, all of that is in the past.

The National Green Tribunal said in the interim, a relief order would be in force until a final ruling was announced after July 10 this year.

Sterlite, a unit of Vedanta Resources Plc controlled by non-resident Indian billionaire Anil Agarwal, had filed a petition with the National Green Tribunal challenging the order of the state pollution control board on April 1.

The committee to monitor the plant after its reopening will include the member secretary of the Central Pollution Control Board and the member secretary of TNPCB, among others. This panel will have to sit every week and be present at the plant when production resumes.

Committee members will also have to visit the plant at least three times and prepare a report on the functioning of the plant, as anti-pollution equipment will be installed there. It will also study the emergency plan in and outside the plant, the order said.

The tribunal also directed TNPCB to measure ambient air quality in Tuticorin, and study the health of the people living around industrial pockets in the town.

Incidentally, the bench was critical of TNPCB’s decision to close the plant, saying no data or scientific analysis presented by the board had shown egregious emissions at the location. The closure ordered was not precautionary in nature per se, but punitive, it said.

Immediately after the ruling, Sterlite shares rose on the Bombay Stock Exchange by 2.58 percent.

Sohrab Darabshaw contributes an Indian perspective to MetalMiner.

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