'Tamil Nadu top loser': India now net importer of copper with Sterlite plant closure

By NS Venkataraman*
It is now more than three years, since Sterlite Copper in Tuticorin was forcibly shut down in 2018 by Tamil Nadu government, in the wake of the violent agitation by a mob.

In the light of such agitation, which resulted in death due to police firing, the then Tamil Nadu government ordered closure to buy peace with the agitators, who were encouraged by some political outfits, some environmentalists and other unknown agencies.
As the unit has been remaining closed for long time now, thousands of local people have lost jobs who were directly or indirectly employed due to the operation of Sterlite Copper. As the Sterlite Copper also involved itself in several welfare activities such as running school, hospital etc., local people have lost several benefits after the closure of Sterlite Copper.
Now, the local people have been appealing to the Government of Tamil Nadu to permit Sterlite Copper to resume operation, which would significantly benefit the economy of the Tuticorin region and help the local people.
When the local people wanted to organize a meeting to explain their stand and the benefits of resuming operation of Sterlite Copper, it is reported that the permission was denied by the authorities.
Meanwhile, the case relating to Sterlite Copper reopening is before the Supreme Court and one would not know at this time as to when would the judgement be given and what would be the verdict.

Increasing demand for copper

In view of considerable increase in number of power infrastructure projects, construction and industrial activities in India, demand for copper in India has increased by 27.5 per cent in 2021-22. The demand was 12.5 lakh tonne in 2021-22, up from 9.78 lakh tonne in 2020-21.
During 2021-22, demand for copper from the power infrastructure sector surged over 75 per cent, while it increased by 25.3 per cent in the building sector and 26.3 per cent in the industrial sector. Consumer durable sector’s demand was 12.8 per cent.
In the coming years, more copper will be needed to achieve carbon-neutral scenario. The copper requirement of electric vehicles are four times as much of traditional vehicles . As copper is a key component in electric vehicles (EVs) and the renewable sector, it is necessary to strengthen domestic availability. Any supply shortfall of copper would hamper India’s progress towards net-zero emission goals.
With India currently being net importer of copper , India is likely to face a shortage scenario for copper. In such scenario, there is urgent and compelling need to increase the production of copper in India.
Copper supply is under stress globally, particularly due to political development in Peru, where the Las Bambas mine halted production of Copper on February,1.,2023. China’s industrial growth is expected to be 5 per cent in 2023 and this could result in greater demand for copper.
The combination of a faster than expected recovery in Chinese demand and a fall in Latin American supply amidst low inventories could drive copper prices higher in the global market. It is expected that copper price would remain high in 2023.
As the global demand for copper is on the rise in view of net-zero emission targets, copper prices have increased to $10,000 in 2022 from its average price of $6,023 in 2018, which points to the importance of copper production in India.

 Closure of Sterlite Copper: Impact

While India’s present installed capacity of copper is 1.02 million tonne per annum ,India produced less than half of the capacity (4.42 lakh tonnes during the January-November 2021 period) due to closure of Sterlite Copper in Tamil Nadu in 2018.
When Sterlite Copper was operating, India was net exporter of copper. India has now become a net importer of copper due to reduced domestic production, consequent to the closure of Sterlite Copper. India now has to spend several thousand crores of rupees in foreign exchange every year for import of copper.
Vedanta’s Sterlite Copper was functioning in Tuticorin SIPCOT premises since its inception in 1996 and had become one of the leading copper producers in the country.
Sterlite Copper project in Tuticorin originally involved an investment of over Rs.3000 crore and has been successfully operating for the last several years with consistent track record and made India to be a net exporter of valuable copper metal. As a matter of fact, Sterlite Copper has successfully challenged several multinational copper producers in the international market and brought laurels to India.
When Serlite Copper was operating, it was meeting around 33% of India’s requirement of copper.

Allegations

Number of allegations were made against Sterlite Copper by some environmentalists, some political parties and what appears to be vested interests, for whatever reasons. A careful study of the scenario highlight the fact that such allegations were not true and contrary to facts and prove that closure of Sterlite Copper is unjustified.
One complaint made was that Sterlite Copper was emitting sulphur dioxide gas, which is not true.The fact is that there are a number of coal based thermal power plants and sulphuric acid plants in Tuticorin, not far away from the Sterlite Copper plant. The coal based thermal power plants in Tuticorin may be emitting sulphur dioxide gas , since coal contains sulphur.
The coal based power plants in Tuticorin and sulphuric acid plants in Tuticorin do not have flue gas de sulphurisation units, whereas Sterlite Copper has desulphurisation unit to prevent sulphur dioxide gas emission.
It is quite possible that if any sulphur dioxide emission level in Tuticorin has been above normal, it might have been due to the operation of the coal based thermal power plants or other sulphuric acid plant or several other possible reasons such as large scale sea port operations in Tuticorin, heavy vehicle movement using diesel fuel for transportation of goods to and from the port etc.

There were a few other false allegations such as Sterlite Copper plant operation was causing cancer, which is unsubstantiated. In Chennai, there is no copper unit but cancer prevails. In Bangalore, there is no copper unit, but cancer prevails and this is so all over India.

When Serlite Copper was operating, it was meeting around 33% of India’s requirement of copper

The other allegation was that Sterlite copper was letting out impure water. The fact was that Sterlite Copper never let out any water and process water was treated and reused in the plant. This was a case of zero effluent discharge.

The fact is that the atmospheric, soil and ground water conditions in Tuticorin area even after three years of closure of Sterlite Copper has not changed for any better. There is no evidence that the health conditions of the local people have improved in any way after the closure of Sterlite Copper.
This only proves the fact that Sterlite Copper has not caused any problem and the unit has been sinned against rather than sinning. When cases were filed more than once , the Green Tribunal / Courts have given verdict in favour of Sterlite Coper operating the plant.

Tamil Nadu a loser

All said and done, Tamil Nadu and India have not gained anything by the closure of the Sterlite Copper and only some environmental activists and some political parties have derived vicarious satisfaction by “successfully “ ensuring the closure of Sterlite Copper.
Tamil Nadu government is losing huge revenue that it was getting earlier, when Sterlite Copper was in operation. It is now targeting to achieve 1 trillion dollar economy in the coming years in the state. Operation of Sterlite Copper can significantly contribute to achieve this ambitious target.
The prospective project promoters in Tamil Nadu from outside Tamil Nadu or abroad may think several times before investing in Tamil Nadu in chemical or allied projects, after seeing the bitter experience of Sterlite Copper.
It is reported that Vedanta group attempted to sell the Sterlite Copper unit but there were no takers with reasonable offer . Probably, this is due to the apprehension that Tamil Nadu government’s attitude towards Sterlite copper could be counter productive and negative , for whatever reasons.
The ball is now clearly in the court of Tamil Nadu government. Tamil Nadu government should decide the future of Sterlite Copper, by permitting operation of the unit, that would create confidence in the mind of investors about investing in large scale chemical, metallurgical and allied projects in Tamil Nadu.
Whatever that has happened in the past, Tamil Nadu government should urgently look into the feasibility of permitting Sterlite Copper to resume operation, taking a holistic and progressive view, in the larger interest of the state and the country.
If necessary, the Tamil Nadu government should take the environmentalists and protestors into confidence by initiating discussions with them, explaining the need to operate Sterlite Copper unit and perhaps, put forth any pre condition to the management of Sterlite Copper in operating the plant, based on the views of cross section of stake holders.
Tamil Nadu government should realise that Tamil Nadu is losing income and opportunity due to closure of Sterlite Copper.
It is necessary to erase the impression amongst the investors that a group of agitators can bring down a large capacity plant by violence and intimidation.
Above all, the views of the local people in Tuticorin who have been demanding that Sterlite Copper should be allowed to resume operation must be heard by the Tamil Nadu government, since the agitation in the past have been carried out by the agitators in the name of “protecting the health and economy of Tuticorin region”.
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*Trustee, Nandini Voice For The Deprived, Chennai