Abstract
Copper is important to the economy of the country. Despite the need and demand for copper in the country and that the central government itself wants to promote the manufacture of copper in the country, Sterlite Copper in Tamil Nadu, which used to produce one-third of country’s copper requirements, has been forced to shut down due to various protests and pressures. Now Vedanta has put the Sterlite plant on sale. This is a pity. The author briefly describes the issues that led to the plant’s closure and what’s the future for Sterlite Copper.
It is reported in the media that NITI Aayog member V.K. Saraswat has pitched for providing a production linked incentive ( PLI) scheme to the copper sector, stating that primary copper production is critical for India to be an export hub.
The above statement is surprising, since Sterlite Copper, a large copper unit has been forced to remain closed for over four years now in Tuticorin, Tamil Nadu and the subject is before the Supreme Court for decision regarding reopening the unit.
Indian Copper scenario :
There are three copper smelter units set up in India namely Hindalco at Dahej, Gujarat with installed capacity of 5 lakh tonne per annum, Sterlite Copper at Tuticorin, Tamil Nadu with installed capacity of 4 lakh tonne per annum and Hindustan Copper Ltd. with much smaller capacity.
Hindustan Copper Ltd produces copper metal from the ore produced at their captive mines. Sterlite Copper and Hindalco Industries Ltd have been producing copper metal from imported copper concentrates.
Sterlite Copper Unit:
Sterlite Copper unit which was set up over a decade back in Tamil Nadu was closed and re opened more than once due to environmental issues raised by some activists.
Sterlite Copper has consistently said that it has not violated any environmental norms. National Green Tribunal confirmed that if there was any environmental issue in Tuticorin region, it has not been due to Sterlite Copper, but for some other reasons. National Green Tribunal permitted the operation of Sterlite Copper. However, due to violent agitation by the activists, the Sterlite Copper unit was ordered to be closed by Tamil Nadu Government in May,2018.
While the unit has not been in operation for over four years now, a few investigation team including from Anna University have confirmed after detailed study that there have been no change in the environmental condition in Tuticorin region after the closure of Sterlite Copper unit. Obviously, this means that Sterlite Copper Unit has not been responsible for causing any environmental issue in the region.
When Serlite Copper was operating, it was meeting around 33% of India’s requirement of copper, with annual copper demand of around 6,30 000 tonne per annum in India.
When Sterlite Copper was operating, India was exporting copper. After the shutdown of production at Sterlite Copper, India is now importing copper and is now net importer of copper with huge outflow of foreign exchange. In the global market, Chinese copper units gained considerably due to the stoppage of copper export from India.
What’s in future for Sterlite Copper?
It is now not clear as to what would be the future of Sterlite Copper plant in Tuticorin, since the matter is before the Supreme Court.
However, it appears that the motivated activists protesting against Sterlite Copper operation and the politicians belonging to the ruling party and their allies in Tamil Nadu appear to be determined not to permit the resumption of operation of Sterlite Copper.
Due to the closure of Sterlite Copper unit , around 2000 direct employees and around 7000 indirect employees such as workers employed by the contractors have lost their job. They have repeatedly appealed to the Government of Tamil Nadu to reopen Sterlite Copper unit.
A number of residents living in Tuticorin and surrounding areas have also appealed to Tamil Nadu government to reopen Sterlite Copper, as the continued closure is adversely impacting the economy in the region. Number of them confirmed that they have not been affected due to operation of Sterlite Copper.
Shift the Sterlite Copper unit out of Tamil Nadu
While the concern of the NITI Aayog member about inadequate production of copper in the country is appropriate, what is the point in launching the PLI scheme for copper production when a large capacity copper unit has been forced to remain closed in Tamil Nadu?
Considering the fact that Sterlite Copper was operating well and was also exporting copper successfully around the world, it is necessary that this valuable project should not be allowed to go waste.
Under the circumstances, considering the ground reality that there is a motivated hate campaign against Sterlite Copper unit by some activists and the state government is not in favour of the project for whatever reasons, the Government of India should encourage the Vedanta Group to shift the Sterlite Copper unit out of Tamil Nadu.
While shifting this large copper plant from Tuticorin to another location would be an expensive affair, it would certainly be much less expensive and much less time-consuming than setting up a new copper smelter project elsewhere.
Tamil Nadu’s loss will be a gain for some other state and certainly it would be a gain for the country as a whole.
