Vedanta, the London-listed company founded by billionaire Anil Agarwal, has suffered a fresh blow in India, where a court has ordered the immediate shutdown of its massive copper smelter in the south citing violation of environmental laws in a sensitive coastal area.
Tuesday’s ruling by the Madras High Court came a month after India’s environment ministry rejected Vedanta’s plans to mine bauxite in the eastern state of Orissa, and during a sensitive time as New Delhi is considering whether to allow Vedanta to take a $9.6bn controlling stake in Cairn India, a rival which operates lucrative and strategically important oilfields in the northern state of Rajasthan.
The copper smelter in question is the Tuticorin plant in the state of Tamil Nadu, which has been operating for more than 12 years and which Vedanta has been planning to expand.
Critics had argued that the Tuticorn smelter – which is owned by Vedanta’s subsidiary Sterlite Industries – had caused unacceptable levels of air and groundwater pollution less than 25km from the Gulf of Mannar national marine park, one of the most bio-diverse coastal regions in Asia.
In their verdict, judges said the smelter was emitting noxious air pollution, that the plant’s effluents were hazardous and caused high levels of heavy metals, arsenic, and fluorides in the groundwater, and that the entire plant site was now “severely polluted.”
The judges also ruled that the plant’s location, being so close to the marine park, violated the company’s operating permissions from the Tamil Nadu Pollution Control board, which specified the smelter should be located at least 25 kms away from any ecologically sensitive area.
The judges were quoted by a local newspaper as saying that the “unabated pollution” caused by the company should be stopped, at least for now, to protect “Mother Nature”.
Established in 1996, the Tuticorn smelter has annual capacity of 400,000 metric tonnes, and the company has been aiming to double that by the middle of next year.
Sterlite’s copper business generated around $2.8bn in revenues last year, according to the annual report.
Company executives said they were awaiting a full text of the judgement before deciding how to proceed. “The Tuticorin smelter has been operating for more than 12 years and has been in compliance with necessary rules and regulations,” the company said in an emailed statement to local journalists.
India has been stepping up its efforts to more tightly enforce environmental regulation and laws, amid growing concern about the ecological cost of its current development drive.
Lafarge, the global cement giant, recently had its plan for an integrated $187m cement plant in the sensitive Himalayas blocked by an environmental watchdog.
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