Madras HC refuses to allow Sterlite to reopen its copper plant in TN

In a major setback to the Vedanta Group, the Madras High Court on Tuesday refused to allow the reopening of Sterlite Copper’s smelter unit at Thoothukudi in Tamil Nadu. Justices TS Sivagnanam and V Bhavani Subbaroyan, in an 815-page judgment, dismissed a batch of 10 petitions filed by Vedanta, challenging, among other things, the Tamil Nadu Pollution Control Board (TNPCB) order rejecting the ‘consent to operate’ the plant.

The judges refused to order status quo to enable Vedanta go on appeal in the Supreme Court. A petition to demolish the plant has been referred to the Madurai Bench of the Madras High Court.

Sterlite will appeal against the High Court order in the Supreme Court soon, the company’s CEO Pankaj Kumar told BusinessLine. “ The verdict comes as an utter shock to the employees of Sterlite Copper and thousands of small businesses, entrepreneurs and community members dependent on our continued operations,” he said.

Closure, a knee-jerk reaction

“We firmly believe in the safe and environmentally sound nature of our operations and are discouraged by the wilful reliance on anecdotal evidence and half-truths by certain parties to spread falsehoods against our operations. At no point in our operations were any concerns of pollution raised by the appropriate authorities,” he added.

Surprised by the verdict, C Aryama Sundaram, Senior Counsel for Sterlite, told this newspaper that it has always been the company’s stand that the closure was a knee-jerk political reaction of the government, after protests by certain vested interests led to police firing.

Sterlite, which caters to nearly 40 per cent of India’s copper demand, has been affected since its closure in May 2018. Having invested over ₹3,000 crore in the plant, the company has lost ₹4,000 crore since its shutdown, a company official said. It employed 4,397 people directly and benefited over 17,000 people, representing various stakeholders such as product makers, transporters and suppliers. The judgment will also mean that India will continue to remain a net importer of copper for a while.

Bumpy ride

It has been a bumpy ride for Sterlite ever since it entered the State in 1994. It has been accused of polluting the environment and closed several times. It had to seek legal remedy each time to re-start its operations. In fact, the Supreme Court had once fined the company ₹100 crore for violating the norms but allowed it to re-open the plant.

The most recent trigger for its closure were the protests that erupted after the company got approval for doubling its smelter capacity from 4 lakh tonne to 8 lakh tonne. As the protests gained momentum TNPCB, on April 9, 2018, refused to grant the Consent to Operate citing environmental concerns. The TNPCB ordered closure of the plant permanently after 13 anti-Sterlite protesters were killed in police firing on May 22 that year.

Vedanta appealed successfully to the National Green Tribunal challenging the TNPCB and State government’s orders. But the Madurai Bench of MHC stepped in and ordered status quo. Vedanta's attempt to move the Supreme Court against the order failed as the apex court not only refused to reopen the plant but directed the company to approach the MHC. Tuesday’s judgment means the Supreme Court will be called into action once again to look into the issue.

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