Vedanta sticks with plan to expand Tamil Nadu smelter despite deadly protests

By Krishna N. Das

NEW DELHI (Reuters) - London-listed Vedanta Resources hopes to restart its copper smelter in a city in Tamil Nadu and still wants to double its capacity despite protests demanding its closure that killed 13 people this week, a company executive told Reuters on Friday.

The company's position comes a day after Tamil Nadu, where the smelter is located, said it was seeking a permanent closure of the plant due to allegations that it pollutes the air and water of the locality.

"We're not in that stage to look at setting up a plant elsewhere," P. Ramnath, chief executive of Vedanta's India copper business, said in an interview.

"We're confident that we will be able to overcome these issues. It will certainly require a huge effort but I am sure we can hope to restart as quickly as possible."

The plant, in the coastal city of Thoothukudi, has been shut since late March for maintenance and pending a renewal of its licence, even as locals continued largely peaceful protests demanding its permanent shutdown.

The opposition escalated on Tuesday when thousands of people marched towards a local government office on the 100th day of the protest. Ten people died in police firing that day; three more died in subsequent days.

Ramnath said the smelter suffered from a "perception" that it was the most polluting industry in Thoothukudi because of its size, and that support of the local community would be important to restart the plant and double its capacity, as suggested by Vedanta's billionaire chairman Anil Agarwal.

"Our chairman has said that we need the licence to operate, but also we need to build bridges with the local community so that we get their licence to operate as well," he said.

"But at this point of time the atmosphere is very tense, temperatures are high."

LEGAL OPTIONS

The Tamil Nadu Pollution Control Board cut the power to the smelter on Thursday, saying that last week it found the company preparing to resume production without permission.

Ramnath denied the allegation.

"There was no reason for making preparations to restart the plant when we are still under maintenance that happens once in four years," he said.

Ramnath said the company was considering legal options to get power restored to the smelter, which produces 400,000 tonnes of copper a year.

Around 250,000 tonnes of the output is consumed locally, making up for 36 percent of India's demand. The rest is exported to countries such as China.

Vedanta wants to double the smelter's capacity mainly to meet India's rising copper demand, which Ramnath expects to grow by up to 10 percent annually. The expansion would, however, be delayed from its earlier completion target of late 2019.

(Reporting by Krishna N. Das; Editing by Sanjeev Miglani and Elaine Hardcastle)