From a small steel scrap business Anil Agarwal built a huge empire producing a range of basic minerals including aluminium, copper, zinc, lead, silver, iron ore, steel, power generation and oil and gas. Total revenues of the Agarwal’s Vedanta Group are estimated around $35 billion from operations spread across the globe (around Rs 2,62,500 crore, the size of Tamil Nadu’s annual revenues).
In India the operations, valued over $7 billion, are spread over the production of aluminium, coal, copper, zinc, iron and steel, optical fibre, oil and natural gas and provide large scale employment. Vedanta has been acquiring companies across the globe. More recently the Vedanta group acquired the sprawling Videocon group’s activities through the NCLT.
Few weeks back Anil Agarwal addressed the Indian Chamber of Commerce. Disappointingly, the burning issue of Sterlite Copper remaining closed for over three years was not mentioned.
I could understand; the Thoothukudi plant is just a small portion of the sprawling Vedanta empire. But sadly, it is vital to Tamil Nadu and the nation. Quite shockingly, the stoppage of production for over 40 months doesn’t seem to be of concern to those most responsible for this.
Sterlite Copper plant was the first major investment in Tamil Nadu post the 1991 libe-ralisation. At that time it was sought for its location in the industrially backward, sparsely populated Thoothukudi district. For nearly three decades the plant, excelled in the production of 400,000 tonnes of copper plates and rods, supported by phosphoric and sulphuric acid plants and contributed richly to the state and the Centre. It was providing direct employment to close to 3000. The need to move over 15 lakh tonnes of raw materials and finished products in a year demanded employing 4000 trucks a day. This meant employment to around 27,000. Sterlite also was a prized customer of the Thoothukudi Port.
Its performance was in contrast to that of SPIC which was sick for close to three decades due to a huge increase in the price of feed stock naphtha. The other old plant of DCW was also stagnant. Of the three power plants, one turned sick. Other than these Thoothukudi had only the traditional industries of salt pans and marine fishing that offered jobs on modest wages.
An agitation by sections of the local population, allowed by inept Central and state governments to prolong for 100 days, turned violent and resulted in the police firing to stop arson and rioting that caused the death of 13.
Sterlite accounted for 40 per cent of the country’s copper demand. This is now met by expensive imports. Copper price has shot up from around Rs 350 to Rs 850 per kg resulting in corresponding increase in the price of appliances and a variety of copper-based products.
With prolonged litigation the plant has remained closed for over 40 months. A simple and sensible solution of appointing a high-power committee of experts to look into the issue of pollution when the agitation started, could have saved precious lives and this vital plant. Remember such a solution was found for tackling the even more widespread agitation against the Kudankulam Nuclear Plant nearby? On the advice of the committee of experts appointed by her, Chief Minister Jayalalithaa took stern action and ended the agitation. In five years the Kudankulam plant has fully recovered the capital cost of over Rs 15,000 crore and is doubling capacity to 4000 MW.
The company could have followed the examples set by two other multinationals – DuPont and Ford Motors – that started operations in Tamil Nadu along with Sterlite. Both were closely involved in a range of social welfare activities and earned the support of the community around. Sadly, the disconnect between Sterlite and the community around and its poor public relations have resulted in its present plight.
This is surprising: inspired by Bill Gates, Agarwal is reported to have pledged to donate 75 per cent of his family wealth to charity.
States and the Centre are bending backward to attract foreign investments: look at the multitude of incentives (PLI, assured power, liberal land allocation, ease of doing business, et al)! Contrast this with the indifference in keeping idle an investment of Rs 3000 plus crore impacting the livelihoods of around 30,000 and denying further larger investments!
The expansion plan of the company to double capacity to 800,000 tonnes was scuttled and from the stage of self-sufficiency and with prospects for exports, the country is in a pathetic, self-inflicted stage of importing precious copper. Atmanirbhar?
Certainly, it doesn’t make sense to burn the house to smoke out a rat.
