Vedanta is said to scrap plans to sell mega Indian copper smelter

31st January 2023 By: Bloomberg

Vedanta has shelved the plan to sell its copper smelter in the southern Indian state of Tamil Nadu, which accounted for almost 40% of the metal’s production in the country, and has doubled down on its efforts to restart the plant, according to people familiar with the matter.

After scrapping the seven-month-old process to offload the 400 000 tons-a-year Sterlite Copper plant, the company will now work with the local population to restart the factory that was shut on environmental concerns, the people said, asking not to be named as the information is not public. Vedanta’s petition to lift a local government order to close the plant will be heard by the Supreme Court on February 21.

Restarting the smelter will lead to a surge in India’s copper output and cut imports. The refined metal is poised to play an important role in the nation’s shift toward electric vehicles and renewables and has lured interest from billionaire Gautam Adani’s group, which has the ambition to become one of the largest copper producers in the country.

India “can’t afford to close this plant permanently when the demand for copper is at its peak in the country,” a spokesman for Vedanta said in an emailed statement, replying to a query on it scrapping the sale process. “There has been a positive sway among the people of the region with more voices coming forward to support the reopening of the plant.”

The company, controlled by billionaire Anil Agarwal was working with Axis Capital Ltd. to sell the assets and had invited bids from prospective bidders in a newspaper advertisement in June. The smelter has been closed since 2018 on orders from the state government following the death of more than a dozen people when police opened fire on villagers protesting pollution from the facility.

India had turned a net importer of the metal for the first time in almost two decades following the plant’s closure, Vedanta’s spokesperson said