Vedanta Resources Plc's Thootukudi copper smelter, one of India's biggest copper smelting plant, will remain shut until at least June 6, a lawyer petitioning against the plant reopening said on Thursday.
The Tamil Nadu Pollution Control Board has adjourned a hearing to grant Vedanta a renewal of consent to operate the smelter until that date, said V Ramasubbu, a local lawyer who filed the petition because of environmental concerns.
Benchmark three-month copper contract on the London Metal Exchange rose to as much as $6,900 per tonne but pared its gains to trade at $6,870.50 at 1017 GMT.
"The market was surprised by the move," said ING analyst Oliver Nugent.
The smelter, which can produce 400,000 tonnes of copper cathode a year, is run by Vedanta's Sterlite Copper unit, which is controlled by Vedanta Ltd, a majority-owned subsidiary of London-listed Vedanta. The plant has been shut since March 27, when it was closed as part of a 15-day scheduled maintenance.
During the closure, the pollution board rejected Vedanta's license to operate the smelter in April, saying the company had not complied with five local environmental laws.
The people of Thootukudi, a port city in the southern state of Tamil Nadu, have been protesting against a proposed expansion of the smelter and are demanding the closure of the plant.
Vedanta says the protests are based on "false allegations" and the company has been providing "regular information through various media on the truth".
The company plans to double capacity at the smelter to 800,000 tonnes per year.
India's copper consumption has been increasing consistently over the last few years. At current local demand growth of 7 percent to 8 percent per year, India may turn into a net importer of copper by the year ended March 2020 if no new plant is commissioned, consultancy firm ICRA Ltd said in an April report.