India court rejects Vedanta’s plea to restart copper smelter
Vedanta will have to keep its plans to resume operations at its copper smelter in India on hold for longer after a local court rejected an appeal to restart the plant.
The Madras High Court on Tuesday refused permission to restart the plant in southern India’s Tamil Nadu state. The court also said it hasn’t yet decided on a petition to the demolish plant. Vedanta can now appeal to the nation’s top court.ADVERTISEMENT
Billionaire Anil Agarwal’s commodities producer stopped operations at the smelter for maintenance in March 2018 and later extended the shutdown due to mounting opposition from villagers against pollution caused by the plant. The state government closed the smelter two months later after more than a dozen people died when police opened fire on protesting villagers.
After multiple court hearings, including a favorable verdict for Vedanta by the National Green Tribunal, the Supreme Court last year stalled the reopening further, saying the green tribunal didn’t have the jurisdiction to decide on the matter. It directed the company to file a petition with the state’s high court.ADVERTISEMENT
The closure of the smelter has “significantly” cut India’s copper cathode production, according to the nation’s mines ministry. The latest order will keep supplies from India muted in the global market and underpin prices of the metal, which have rallied almost 40% since March on the London Metal Exchange.
“The plant staying shut longer doesn’t augur well for the company as copper prices have been doing well,” according to Sanjiv Bhasin, executive vice president at IIFL Securities. “There will be a review of the order, but in the short-term it will be a little bit negative for the company.”
Shares slumped as much 6.1% after the order, the most since May, but pared losses to trade 0.5% lower at 127.35 rupees in Mumbai at 11:09 a.m. local time.
The judgment comes as parent Vedanta Resources prepares to launch a formal offer to buy back the shares it doesn’t already hold of the Indian unit. The proposed delisting is part of Chairman Agarwal’s plan to simplify his investments across a complex multi-tiered corporate structure.
Source: miningweekly.com
