Sterlite to undertake Rs 2,500-cr expansion programme in TN

Comapny also in talks with Holcim Singapore for procurement agreement

After the expansion, the plant, which had earlier faced legal battles over alleged environment issues, will be Asia’s largest copper manufacturing facility at a single location

Sterlite Industries, a subsidiary of the $15-billion Vedanta Resources, is set to carry out a Rs 2,500-crore expansion programme, including doubling copper manufacturing capacity and setting up two 80-Mw power projects, at its copper smelter plant at Tuticorin, Tamil Nadu. After the proposed expansion, the plant, which had earlier faced legal battles over alleged environment issues, will be Asia’s largest copper manufacturing facility at a single location.

The plant’s current capacity is 400,000 tonnes a year.

P Ramnath, chief executive officer of Sterlite’s copper business, said the company hoped in six months, all formalities and legal issues regarding the programme would be sorted.

In 2008, the company had sought nods for the proposed expansion from the government and regulators. However, it was alleged emission from the facility was beyond prescribed limits, and various non-governmental organisations and the Tamil Nadu Pollution Control Board approached different courts over the matter.

Last year, the company was forced to shut the Tuticorin facility for about 85 days, owing to environmental concerns, resulting in revenue loss of about Rs 4,000 crore.  However, the company denied the allegations and took up the matter with the National Green Tribunal, saying it had invested about Rs 500 crore on environmental-control measures.

Subsequently, the company secured a clean chit from the National Green Tribunal and the Supreme Court.

Ramnath said the company had invested about Rs 150 crore in implementing the National Green Tribunal’s 31 recommendations, including setting up a bag house and a flue gas desulphurisation system. Besides, the company had also deposited Rs 100 crore with the state district administration, as directed by the Supreme Court in April 2013.

“Compensation must act as a deterrent and any amount less than Rs 100 crore will not have the desired impact,” the apex court had said in an order.

“Almost all legal issues are over and now, we are ready to take up the expansion. From the legal perspective, only one thing is left, which relates to public hearing,” Ramnath said. According to the environmental impact assessment notification, 2006, if a project is under any industrial estate, it doesn’t need any public hearing for an expansion plan. However, the National Green Tribunal has said a public hearing of the plan is required. Sterlite’s Tuticorin plant is located in the Sipcot industrial estate.

After the expansion, the plant’s contribution to the state exchequer, currently about Rs 1,800 crore, is set to double. The plant generates annual revenues of about Rs 19,000 crore, earnings before interest, tax, depreciation and amortisation of about Rs 1,200 crore and profit of Rs 500-600 crore.

Meanwhile, the company is in talks with Holcim Singapore, an arm of global cement major Holcim, to supply copper slag piling up at the plant. Holcim will use the commodity for cement mix, roads, etc. The two companies expect to sign a pact in this regard soon.