India has turned into a net importer of copper after the closure of the Sterlite copper plant in Tamil Nadu but Adani Enterprises, the flagship business of Gautam Adani, is all set to enter the copper business as the country. The newly incorporated Kutch Copper Limited will now manufacture copper cathode and copper rods, as the country has been importing around half its total demand since the last three years when the anti-national elements forced the Tamil Nadu government to shut down the Sterlite copper plant.
“KCL is incorporated with the object to undertake copper business-related activities, such as the manufacture of copper cathodes and copper rods and more,” revealed the Adani Group in a filing with exchanges. The shares of Adani Enterprises, the flag entity under which the KCL is incorporated, climbed by four per cent after the news was made public.
After the Sterlite plant was shut down facing a series of protests, India, a net exporter of copper in the last two decades turned into a net importer in FY 2018-19. The Tuticorin plant accounted for more than 40 per cent of the country’s total copper production, and ever since the plant was shut down, the domestic downstream manufacturers were forced to import copper from countries like Japan and China.
From 2013-14 to 2017-18, copper production in India grew at double-digit (9.6 per cent) and suddenly the output fell by 46 per cent in FY 19. The sudden closure of the Sterlite plant halted production of 4 lakh tonnes of copper, as the company accounted for 40 per cent of the country’s copper smelting capacity. The total copper smelting capacity of the country is around 10 lakh tonnes.
The total import of copper reached 14,000 crore rupees in the last fiscal year and countries like Japan, Singapore, Congo, Chile, Tanzania, the United Arab Emirates, and South Africa benefited from this. Imports rose by 131.2 per cent while the export of copper cathodes fell by 87.4 per cent, from 395-kilo tonnes in FY 18 to 48 KT in FY 19. In the last FY, exports grew by 12.3 per cent while imports grew by 35.6 per cent.
The majority of India’s copper export goes to China (75 per cent) and Taiwan (13 per cent). The closure of Sterlite’s plant benefitted Chinese companies which were facing tough competition from Indian exports. Given the better quality of Indian products, Chinese consumers preferred Indian copper and this harmed the interest of Chinese companies.
After the protests, the Tamil Nadu government had ordered the complete closure of the plant in May 2018. But the National Green Tribunal (NGT) cleared the reopening of the plant a few months back. However, the Supreme Court overruled the NGT order and the plant remains non-operational ever since. The matter is sub-judice and the case is pending in Madras High Court.
In Tamil Nadu, DMK and AIADMK, the opposition and the ruling party respectively, took a stand against the Sterlite copper plant. But now the state is set to lose its leadership in the copper industry, thousands of crores rupees in tax revenues, and lakhs of direct and indirect employment permanently to Gujarat.
It was earlier reported by Swarajya that the churches in the region had appealed to its members to support the Sterlite protests. The magazine had also reported that one of the mobs, comprising of around 5,000 people, had gathered in front of one of the churches in the region before it proceeded to wreak havoc.
The article also went on to claim that according to the Intelligence Bureau, the protestors also included Naxals and that the police had been tipped off about this. The protests had found traction among many politicians in Tamil Nadu including Kamal Haasan.
So, it seems that the nexus between the some Church elements, Naxals and the foreign, particularly the Chinese competitors of Vedanta, may have succeeded in hurting the economic interests of India, Tamil Nadu, and the poor people in the region due to the lacklustre attitude of state government. However, the loss of Tamil Nadu would soon become the gain for Gujarat and the loss of Anil Agrawal-led Vedanta Group would become the gain of Gautam Adani-led Adani Enterprises.