Authorities from the southern Indian state of Tamil Nadu have ordered the permanent closure of the country's largest copper smelter, controlled by Vedanta Resources (LON:VED), after a new round of violent protests against the plant ended last week with police killing 13 people.
Locals disapprove the expansion of the group's Sterlite Copper plant at Thootukudi, in Tamil Nadu, because they blame it of polluting their water and air since the smelter was established in 1996. They believe that enlarging the smelter would cause contamination to hit dangerous levels.
Tuticorin was closed down for about two months in 2013 due to violent protests against the copper plant. An environmental court later ruled the smelter could continue to operate but should take extra steps to prevent pollution.
Deadly protests last week over alleged pollution from the Tuticorin smelter have prolonged a shutdown of the 400,000 tonnes-a-year operation.Vedanta, India's largest miner and No. 1 iron ore exporter, has repeatedly said it not only implemented all of the authorities recommendations, but also adopted state-of-the-art technology to improve safety and energy conservation while reducing waste.
But protest continued. In light of last week's deaths, the Madras High Court had already ordered an indefinite suspension of the plant's planned extension, commanding an immediate electricity supply cut. The company replied to the measure by warning the shutdown was already causing a copper deficit and increased prices in India.
Vedanta's shares, which are down more than 25% since the start of the year due to a series of bad news hitting its operations, dropped again Monday following the news and were trading at 728.20 p close to the end of the trading session in London.
The company, which earlier in the year was hit by an iron ore mining ban in its home country and a steel acquisition roadblock, is currently one of the biggest losers among the 10-member S&P BSE India metal index that's slid 12%.
Chairman and founder Anil Agarwal said Monday Vedanta was a "victim of fake activism"."Anti-development associations?EUR?.?EUR?.?EUR?.?EUR?are time and again raking up the sentiments of the public for their vested interests that have now cost the lives of innocent people," he told India's Economic Times. "They wish to destabilise Indian industry."
Vedanta's Tuticorin smelter had an annual production capacity of 400,000 tonnes, which would have doubled with the now thwarted expansion plan.
With files from Bloomberg.