India’s leading refined copper producer Sesa Sterlite Ltd will shut its smelter for 22 days starting April 26, the first pit stop for the smelter in the last four years.
Sesa Sterlite is a unit of billionaire Anil Agarwal-controlled Vedanta Resources Plc, and produces 30,000 tons of refined copper per month and exports half of that to China.
An unnamed Sesa source was quoted in Live Mint as saying they had wanted to close the plant last year for maintenance but could not because of the forced shutdown on environmental grounds. The smelter had been shut for over two months from March 30 last year on complaints of emissions. Official confirmation from Sesa Sterlite on the exact date of temporary closure had yet to come in before this writing.
April’s maintenance shutdown, say experts, could help support global copper prices, which fell to three-and-a-half-year lows last week. MetalMiner had reported earlier this month how the reduced demand from China and historically high systemic inventory levels of the metal were likely to keep copper prices suppressed, but a surge in demand from the US and Europe could support its price above the current level.
Sesa Sterlite’s smelter shutdown last year had reportedly created a shortage for Indian cable makers, which had diminished only after an environmental court’s order to restart the plant. This time, though, unnamed company officials have tried to allay fears of similar supply shortages.
Sesa Sterlite was formed from a US $3.9 billion merger of Sesa Goa and Sterlite Industries in 2013, which was ranked second highest among the top 10 global M&A deals in Asia Pacific in 2013, according to PwC in its latest global metals and mining report.
Sesa Sterlite Ltd is trying to expand its copper smelting operations in India for some time now, but in the past has often blamed poor government response and regulations, among other reasons, as a growth hurdle. In January for example, the London-listed Vedanta Resources Plc lost a seven-year battle to mine bauxite in the eastern state of Odisha after India’s Supreme Court had ordered that local tribespeople should decide on the project. The latter had voted against it.
This came as a big blow for Vedanta because it had already spent over US $8.1 billion on an aluminum refinery, smelter and power plant in anticipation of access to local mines.
Sesa’s temporary shutdown of its copper smelter in April, some say, may even help its rival producer Hindalco Industries, but that will be known when the smelter re-opens.