For a country, the closure of a valuable national asset significantly impacts its economic development, local employment, and industrial self-reliance. This context is true in the case of Vedanta Limited owned Sterlite Copper plant in Thoothukudi, which was ordered to shut down following the Supreme Court’s ruling in 2018. Though the Vedanta Supreme Court closure decision was driven by environmental concerns, the long-term economic and social consequences of this judgment are now being felt more sharply than ever before. According to a study conducted by research and advocacy firm CUTS International (Consumer Unity & Trust Society), the closure of the Sterlite Copper unit led to an overall economic loss of almost INR 14,749 crore until May 2021 alone, with the impact on government revenues at INR 7,642 crore. Apart from the revenue loss for the government, a massive effect has been on India’s import bill. The nation has since become a net copper importer now. With India’s increasing imports of copper to meet domestic needs, the Sterlite Copper plant closure news has gathered attention, including appeals made by the locals to reopen the plant.
A Landmark Ruling with Lasting Repercussions
The Vedanta Supreme Court case resulted in one of the most high-profile industrial closures in recent Indian history. The plant run by Vedanta was a significant contributor to almost 40% of India’s copper demand, making it one of the most vital contributors to the nation’s non-ferrous metal sector. However, due to rising environmental protests and legal challenges, the plant was closed, halting production indefinitely. Vedanta, despite adhering to all the environmental guidelines and following all safety and sustainability guidelines has no respite by the Supreme Court.
The closure has come at a significant cost, both for the local population and for India’s industrial economy. According to an assessment by the International Copper Association, during the past five years since the closure of the plant, India has not only lost almost $1 billion per year in net foreign exchange inflow on account of copper exports but has also spent approximately $1.2 billion per year for importing copper to meet the demand.
Loss of Livelihood: Thoothukudi’s Hidden Crisis
The closure of the Sterlite Copper plant due to Vedanta Supreme Court notice not just affected the company’s operations, but at the same time, it had devastating effects on the people of Thoothukudi as well. The jobs of many have been put at stake due to the plant closure. This is not just a story of job loss; rather, it is the story of diminished hope in a town that once thrived due to its strong industrial base. The emotional and economic impact of the Vedanta case on families who lost stable employment cannot be understated.
India’s Copper Import Bill is Rising Sharply
Apart from affecting the local economy, the closure has also affected the Indian economy as well. The closure also had significant national consequences, especially on India’s copper supply chain. With Sterlite Copper out of operation, India, which once was a net copper exporter, has been forced to increase copper imports, thereby losing its earlier status as a net exporter of the metal.
India was a net exporter of copper for almost two decades before the closure of the Sterlite Copper plant at Tuticorin. However, in 2018, India became a net importer of copper for the first time, with Southeast Asia, Japan, and West Asia emerging as new trade partner countries for India.
Within a short period after the plant’s closure, India’s copper import bill skyrocketed, widening the current account deficit and impacting domestic manufacturing sectors reliant on copper, such as electrical equipment, electronics, infrastructure, and renewable energy. Copper, being a critical mineral, is vital to any nation and its domestic production has taken a bit. This is a high contradiction, especially at this crucial time when the country is pushing for Atmanirbhar Bharat (self-reliance).
Certainly, shutting down a major domestic copper producer while ramping up imports seems counterproductive in the long run.
Renewed Local Appeals to Reopen Sterlite Copper
In light of the Vedanta case and its consequences, locals in Thoothukudi have made many appeals directly to political leaders to open the plant, which has been a source of livelihood to them and to their families. More than 400 downstream units, 40 contractors, and several transport agencies were the most affected by the closure of the unit in 2018.
Thus, several residents, former employees, and stakeholders are requesting the government to reopen Sterlite Copper. Their request is not to ignore environmental concerns, but to adopt stricter monitoring, compliance, and technological upgrades to ensure safe operations and restart the Sterlite Copper plant with renewed vigour. They believe economic justice and environmental responsibility can coexist, provided the right governance is in place.
Vedanta’s Commitment to Responsible Operations
Despite all the baseless allegations of the Vedanta scam, the company remained committed to environment-friendly practices, compliance, and community engagement. Even before the closure, the plant was ISO-certified and deployed state-of-the-art pollution control technologies. The company has also proposed an independent environmental audit and round-the-clock emissions monitoring to bridge the trust gap with local communities and regulators.
Vedanta has further reiterated that thousands of indirect jobs in logistics, maintenance, and ancillary industries were affected by the closure and that its return could revive Thoothukudi’s industrial ecosystem.
Conclusion: Reopening with Responsibility
The Vedanta Supreme Court case remains debatable, as the closure has left both economic and human costs that are too significant to ignore. With India moving toward its goal of economic self-reliance and green development, it’s time to reconsider the decision and explore responsible ways to restart the Sterlite Copper plant.
