Closure of Sterlite Copper
29 May 2018 5:01 PM GMT
On May 22, the police opened fire on a violent mob at Tuticorin in Tamil Nadu that claimed the lives of 13 protesters, who were demanding the closure of Anil Agarwal-owned Vedanta Sterlite Copper, which according to the protesters was causing air and water pollution in the area and affecting the health of the local residents. The mob was also protesting Sterlite Copper's plan to add more capacity by expanding the production unit at Tuticorin. As per reports, the protest has been going on for past three months and on May 22, it simply went out of control as the mob tried to attack the collectorate and set afire the adjoining staff quarters of Sterlite Copper. In view of the large-scale protest and the police firing, the Tamil Nadu government on Monday decided to shut down the copper plant at Tuticorin. It endorsed the directive issued last week by Tamil Nadu Pollution Control Board to close the unit citing Constitutional provisions to protect and improve the environment, and in larger public interest. Within an hour of the government order, district officials arrived at the plant to seal the premises. "The decision to close the plant was arrived at upon consideration of the interests and sentiments of the people of Thoothukudi," said Chief Minister Edapaddi Palaniswami in Chennai. "Closure of Sterlite Copper plant is an unfortunate development, especially since, we have operated the plant for over 22 years in most transparent and sustainable way, contributing to Tuticorin and (the) state's socio-economic development. We will study the order and decide on the future course of action," Vedanta Limited said in a statement on Monday.
Sterlite Copper's accounts for a 40 per cent share in India's annual copper production of 10 lakh tonnes and could have a downstream impact on around 800 small and medium units in the electrical sector. Following the Tamil Nadu government's order to shut down Sterlite copper unit permanently, the State Industries Promotion Corporation of Tamil Nadu Nadu (SIPCOT) cancelled the land allotted to Vedanta Limited for the proposed expansion of Copper Smelter Plant (phase II) in Tuticorin. The shutdown is likely to impact India's copper exports as for Sterlite Copper exports contributed 41 per cent (around 1.6 lakh tonnes) of overall sales for 2016-17. If no new plant is commissioned, India which is witnessing a growth in copper consumption by 6-7 per cent annually is projected to turn into a net importer of the metal by March 2020. The shutting down of the Tuticorin smelter could advance this projection. Currently, the three major players who dominate the Indian Copper industry include Hindustan Copper Limited (HCL), a Central government public sector unit with a production capacity of one lakh tonne, Hindalco Industries, and Sterlite Copper are the two private sector companies, which produce 5 lakh tonnes and 4 lakh tonnes of copper annually. Around 40 per cent of the copper produced in India is exported.
The violent protests and police firing in Tuticorin that claimed 13 lives rocked Tamil Nadu Assembly on Monday with Chief Minister K Palaniswami maintaining that police action was "unavoidable" even as the main opposition DMK staged a walked out over the issue. DMK leader and the Leader of the Opposition in Tamil Nadu Assembly, M K Stalin targeted the government for issuing a government order instead of convening the Cabinet and taking a policy decision for the closure of Sterlite Copper. Stalin further said that following a similar closure in 2013, the plant had reopened. Legal experts are of the opinion that the courts may cancel the government order to shut down Sterlite Copper.
The controversy surrounding the public protest against the copper production facility in Tuticorin brings the clash between the industry's efforts to expand and ramp up its production and the local residents' opposition to these efforts on the grounds of cost to the environment in the open. In a large part of the country's industrial region where mining and production facilities are looking to augment and expand their operations, frequent and violent public protests are coming in their way. Last year in March, South Korean steel major Posco scrapped the plan to set up a 12-million-tonne steel plant in Paradip, Odisha, after the land acquisition efforts faced stiff resistance from the local residents. The company wrote to the state government that it wants to surrender the land allotted for the project. This was the second big-ticket foreign direct investment (FDI) project to leave the state after ArcelorMittal scrapped its $12 billion (Rs 50,000 crore) steel plant over delays and problems in acquiring land and securing iron ore linkages.
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