Sterlite copper smelter stays shut until at least May 14

NEW DELHI Wed May 8, 2013 2:37pm IST

A view shows the backyard of Sterlite Industries Ltd's copper plant in Tuticorin, in Tamil Nadu April 7, 2013. REUTERS/Stringer/Files

A view shows the backyard of Sterlite Industries Ltd's copper plant in Tuticorin, in Tamil Nadu April 7, 2013.

Credit: Reuters/Stringer/Files

Related Topics


Rajalakshmi (C), 28, smiles after winning the Miss Wheelchair India beauty pageant in Mumbai November 26, 2014. REUTERS/Danish Siddiqui

Miss Wheelchair India

Seven women from across India participated in the country's second wheelchair beauty pageant, which aims to open doors for the wheelchair-bound in modelling, film and television, according to organisers  Slideshow 

NEW DELHI (Reuters) - India's biggest copper smelter will stay shut until at least May 14 when a court will review an environmental case again, prolonging a six-week shutdown which is squeezing local supplies and boosting copper concentrate processing fees in Asia.

The Sterlite Industries' STRL.NS plant, which meets half of India's copper demand, was closed on March 30 after residents complained of emissions that led to breathing problems.

Justice Swatanter Kumar of the National Green Tribunal, a special fast-track environmental court, said on Wednesday an expert panel's report had to be given to all parties and set the next hearing for May 14.

The closure of the smelter, which uses imported concentrates, has pushed about 3,000 tonnes per day of concentrates onto the market.

The local environment authority said it might appeal to the Supreme Court if this court decides the plant can re-open.

"Based on the judgment, we may file an appeal with the Supreme Court," said Abdul Saleem, a lawyer for the Tamil Nadu Pollution Control Board.

In a separate case, India's top court last month fined Sterlite about $18 million for breaking environmental laws at the smelter.

The plant produces 30,000 tonnes of refined copper a month - or more than half of India's total production - and nearly half of the output goes to China.

"The closure is already having an impact, physical (copper) supplies are getting tight, and therefore imports into India are positively up," said Sandeep Daga, director at Regsus Consulting Pvt. Ltd. "Even if the plant starts, it will another 2-3 weeks to re-start production."

India's annual copper consumption was about 610,000 tonnes for the year ending March 31, according to government data. Most of its copper exports go to China, the world's biggest consumer of the metal, which used up around 9 million tonnes last year.

"Copper premiums are likely to remain high and could even possibly move up marginally as the plant will remain shut," said a Singapore-based metals trader.

"As of now there is not much of a copper cathode requirement from India but the longer the plant remains closed more and more and people will start looking to cover some of their requirement through imports," the trader added.

Cashing in on regional oversupply after the Sterlite closure, smelters across Asia have been charging the highest fees in five months to process concentrates.

"The impact of Sterlite's closure is that spot shipments have increased in Asia," said a trader at an international firm.

Spot concentrate was trading at treatment and refining charges of about $80 per tonne and 8 cents a pound to China, up by a third from $60 and 6 cents before the closure, added the trader.

The charges are paid by sellers of copper concentrates to smelters for converting the raw material into metal and then deducted from the sale price, based on London Metal Exchange copper prices.

Sterlite, a unit of London-listed resources conglomerate Vedanta Resources Plc (VED.L), controlled by billionaire Anil Agarwal, has been awaiting clearances to double the capacity of the smelter to 800,000 tonnes a year.

The smelter in the coastal town of Tuticorin near the southern tip of India has long been the target of protesters and politicians who say it is a risk to the local fishing industry. (Additional reporting by Siddesh Mayenkar in MUMBAI, Naveen Thukral in SINGAPORE and Polly Yam in HONG KONG; Editing by Amran Abocar and Ed Davies)



Kashmir Attack

Kashmir Attack

Ten dead in Kashmir's worst militant attack in more than a year  Full Article 

OPEC Meeting

OPEC Meeting

Gulf states seek to block OPEC oil output cut.  Read 

E-Commerce Boom

E-Commerce Boom

Online grocers come up trumps in India's e-commerce boom   Full Article 

GDP, RBI Preview

GDP, RBI Preview

GDP growth set to weaken, business wants reforms more than rate cut  Full Article | Related Story 

Jaitley to Rajan

Jaitley to Rajan

Jaitley likely to meet Rajan on Monday to urge rate cut  Full Article 

Banking Sector

Banking Sector

RBI releases final rules for niche bank licensing  Full Article 

Jamini Roy

Jamini Roy

Photo Gallery – Bengali household name Jamini Roy’s paintings  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage