Sterlite feels heat of popular protest amid plans to sell Thoothukudi plant

The decision to sell its Thoothukudi copper plant is unlikely to end the controversy surrounding it

Opinion in the coastal city of Thoothukudi (formerly Tuticorin), around 600 km from Chennai, has been split. There are those who want Sterlite Copper to reopen its smelting and refining unit and others who demand complete closure.

But on June 20, both supporters and critics were taken aback when Anil Agarwal-led Vedanta decided to sell the unit and invited expression of interest (EoI) from prospective bidders. In fact, sources indicate that even the top leadership of the group found out about this decision through a newspaper advertisement. The company has engaged Axis Capital, a company source said, to conduct the due diligence exercise.

This abrupt decision, however, is unlikely to bring closure to the recurring controversy surrounding this plant. Production has been halted since 2018 after protests broke out against the company’s plan to double its annual capacity to 800,000 tonnes. Subsequent police firing resulted in the death of 13 people and injured around 102 people.

At the peak of the pandemic in April last year, the company received the Supreme Court’s permission to produce oxygen for medical purposes, which continued till the end of July. All told, the plant was able to supply around 2,132 MT of medical-grade oxygen to 32 districts in Tamil Nadu. It was after this that villagers from 14 hamlets in and around Thoothukudi approached the state government with petitions requesting the early reopening of the unit. On the other hand, a large community in this fishing belt is still against the plant restarting its operations.

The sale announcement, however, has been met with some cynicism. “This is their drama and we are not ready to believe that. When the state government has sealed the land and the unit, how will they be able to sell the plant? We have already approached the chief minister, district collector and the pollution control board,” said Maria Rajabose Reegan, coordinator, Country Boat Fishermen Association, Thoothukudi.

Reegan added that the land is owned by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and the company will not be able to sell the land without their permission and even the equipment is within the sealed premises. The association is also planning to take legal action against the company’s move.

Sterlite Copper’s smelter has had an ill-fated history. First, in 1994, it was shifted from Ratnagiri in Maharashtra after protestors there destroyed the quarters of construction workers. After being declined entry by Goa and Gujarat, too, due to pollution concerns, the company finally managed to get a green signal from Tamil Nadu in 1996.

But the company’s troubles did not end there. In July 1997, a sulphur dioxide gas leak from the plant led to the hospitalisation of more than 90 people. Then in March 2013, then Chief Minister J Jayalalithaa had ordered the closure of the unit after people complained of eye irritation following another alleged gas leakage but it continued operations after getting a legal breather. In 2019, the Tamil Nadu government had informed the court that it has noticed more than 84 incidents of gas leaks from the plant since 2013.

In May 2013, the company had filed before the National Green Tribunal and won a favourable order to reopen. Subsequently, the Tamil Nadu government went on to appeal before the court. The matter is currently before the Supreme Court. Current Chief Minister M K Stalin, too, had said that the Dravida Munnetra Kazhagam government will not allow the plant to be reopened. In such a scenario, it is not clear why any investor will buy the plant given the opposition from the state government.

“We have no comments about the perspective of a new player. It is observed that a large number of people from Thoothukudi villages and neighbouring areas around the plant have been voicing their support for Sterlite and want it to be reopened,” said a source close to the development. According to an estimate, around 120,000 jobs in and around the area got affected due to the closure of the plant.

Industry sources said the net loser from the protests is the Indian economy. From being a net exporter of copper in 2017-18, India is an importer of copper now. The plant used to produce approximately 40 per cent of India’s copper demand and contributed around Rs 2,500 crore to the exchequer, 12 per cent of the Thoothukudi port’s revenue, and 95 per cent market share of sulphuric acid in Tamil Nadu.

But Vedanta is no stranger to environment- and livelihood-related issues. Its operations in the Konkola Copper Mines in Zambia, bauxite mining plan at the Niyamgiri hills for an aluminium plant, and iron ore mining in Goa were all stalled for these reasons. Even if someone does agree to buy the Thoothukudi plant, the fisher community doesn’t plan to make the transition easy.

Losing its sheen: The copper industry in India

• Major players: Hindustan Copper Limited (HCL) in the public sector, Hindalco Industries and Sterlite Industries in the    private sector
• Total capacity: 10,28,500 tonnes
• Production: 363,638 tonnes in 2020-21 compared to 796,602 tonnes in 2016-17