Vedanta's daily losses since smelter shutdown $200 mln

Last Updated 01 March 2019, 13:37 IST

Vedanta Ltd told an Indian court it has been losing 50 million rupees ($706,000) a day ever since the closure of one of its copper smelters in May, after police fired on protesters against the plant and killed 13 people.

The government of Tamil Nadu state ordered the smelter shut permanently on May 28 last year after bloody protests at the plant in the city of Thoothukudi culminated in police opening fire on demonstrators.

The "unit has been and is continuing to suffer a daily loss of about Rs 5 crores (50 million rupees)," Vedanta said in a petition to the Madras High Court reviewed by Reuters.

That translates to a loss of about 13.8 billion rupees ($195 million) since the plant was shut nine months ago. Vedanta Group Chairman Anil Agarwal had said in July the company could lose $100 million if the plant was shut for a year.

A Vedanta spokesman did not respond to a request for comment. The case, in which the company is seeking to reopen the smelter, is due to open in the Madras High Court on Friday.

Vedanta won a favourable judgment in December from India's Natural Green Tribunal (NGT), clearing the way to reopen the smelter, but India's Supreme Court ruled in February that the NGT did not have the jurisdiction to grant relief.

In addition to a potentially long legal battle, reopening the smelter could face further complications with federal elections due in May. The two main political parties in Tamil Nadu are against reopening the smelter, increasing the likelihood that the shutdown will continue.

Vedanta is also seeking to gain access to its plant, which has been maintained by the government since the shutdown, and said it would need tens of millions of rupees to restore it.

The company "would be subjected to irreparable harm and hardship, not capable of being compensated in monetary terms if the interim reliefs (for access) ... are not granted," Vedanta said in its petition.

Chairman Agarwal is betting big on India despite the troubles over its Tamil Nadu smelter, and plans to invest $8.4 billion in the country over the next three years.

Vedanta's shares have lost about half their value over the last 12 months. They had their largest one-day fall in over a decade in February due to concerns over an investment in South African miner Anglo American Plc.

(Published 01 March 2019, 13:37 IST)

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