NGT panel says Tamil Nadu government overreached by closing Vedanta smelter

By Mayank Bhardwaj and Sudarshan Varadhan

NEW DELHI (Reuters) - An Indian court-appointed panel said on Wednesday that there were insufficient grounds to permanently close Vedanta Ltd's copper smelter and a Tamil Nadu government decision to shut it amounted to administrative overreach.

Police fired on environmental protesters calling for the closure of the plant in Thoothukudi in May, killing 13. State authorities responded by permanently shutting down the smelter.

But a committee of experts set up by the National Green Tribunal, the environmental court, said authorities in Tamil Nadu where the plant is located had failed to comply with procedures before shutting down the smelter.

The company was not given any notice or opportunity to explain its position, the panel said in its order.

The grounds cited for the closure of the plant were not sufficiently "grievous to justify permanent closure", said the panel. State authorities had said that the plant was polluting.

Activists said the plant caused air and water pollution, and posed a risk to fisheries.

The environment court will decide on the panel's report on Dec. 7.

The court is likely to follow the panel's recommendation, and if it did so, it could lead to the re-opening of the smelter.

Vedanta said the plant had been operating in line with local laws. "We as a company have always been environmentally conscious in every aspect of our operations and have followed all regulations laid down by the law," said P. Ramnath, chief of Vedanta's India copper business.

Vedanta is a subsidiary of billionaire Anil Agarwal-controlled Vedanta Resources and the smelter is India's second biggest.

The smelter has an annual production capacity of more than 400,000 tonnes, and the company said last month the closure has affected 350 companies that buy its products.

Reuters this month reported that Vedanta had been selling copper concentrate on the spot market from stockpiles at the closed Sterlite smelter.

(Reporting by Mayank Bhardwaj and Sudarshan Varadhan; Editing by Sanjeev Miglani and Adrian Croft)