Copper end-user industries have urged Tamil Nadu state government to “work out a solution” to restart functioning at Sterlite Copper plant in Tuticorin. This copper plant supplies around 40 per cent of India’s total metal requirement. SME and MSME units of industries informed PTI that the closure of plant has caused disruptions in the supply of the metal. This lead to a rise in imports and also increase in the cost of production.
In May 2018, the Tamil Nadu state government ordered pollution control board to seal and “permanently” close the plant, after series of violent protests over pollution. Sterlite Copper then approached Supreme Court to resolve the issue, where the case is still pending.
The President of the Indian Electrical & Electronics Manufacturer’s Association (IEEMA), Anil Saboo, said copper is a major component used by the industry. This plant alone used to cater around 35-40 per cent of the country’s total copper supply. The electrical equipment industry is suffering a lot due to prices hike of up to 30-40 per cent in the last few months. The fixed-rate contracts of electrical equipment manufacturers with government or private are also affected. Saboo has also mentioned how this affected their cash flows and how their profitable orders are turning into losses.
According to industrial data, India’s refined copper production was about 8,48,000 tonne in 2017-18, while the exports and imports were over 4,16,000 and 2,15,000 tonnes respectively. In 2019-20, the production in the country reduced to 4,08,000 tonne and exports dropped to 29,000 tonne, while imports rose to 3,45,000 tonne.
Industries in the state started functioning from June 2020 after the Lockdown. And copper prices have been going up since then, particularly from October. The prices spiked to 500 to 600 rupees per kg of copper. Muthuraj Raveendran, President of the Compressor Component Suppliers Associations (CCSA) said, “Now, its around 735rupees per kg of copper, which is almost 50% hike in price. Earlier, if we consider the manufacturing costs of motors, copper would contribute less than 20% of total cost. Now, after recent price hikes, it contributes to about 33% of total cost.”
G Krithika, Vice President of Coimbatore Compressor Industries Association (COCIA), also requested Tamil Nadu government to find a solution to restart the plant. There are lots of such associations and organizations related to pumps and motors. And we can clearly see, they are all significantly impacted.
Railway Suppliers Association (RASA) recently in representation to Tamil Nadu government said, during February alone, the price has rose by 21 per cent. The association notified the government that copper price is expected to reach USD 12,000 per tonne, which means it will be as high as 1,000 rupees per kg in India. RASA requested the Tamil Nadu government to reconsider the decision to shut down the Sterlite Tuticorin plant permanently. It urged the government to regulate strict safety provisions through an expert committee before re-commissioning without having to compromise environment safety and public health. “The increase in indigenous copper production will at least shield the small industries from further price increase.”, RASA said.