Sterlite effect: India’s dependence on copper imports to continue

India’s dependence on import of copper would continue for the next few months, at least, with the Madras High Court refusing to stay the Tamil Nadu government’s order closing down Sterlite Copper, which has an annual production capacity of 4 lakh tons.

Industries that depend heavily on copper for manufacturing products like wires, and by-products such as Sulphuric Acid and Phosphorous Acid, said the continued closure of the Sterlite Copper plant in Thoothukudi, 610 km from here, would only push the country towards importing them at a time the government is stressing on ‘Atmanirbhar’ (self-reliance).

They also said such industries would continue to suffer for a longer time as there is a huge gap between demand and supply of the commodity.

India’s copper imports doubled within a year of Sterlite Copper being shut down by the Tamil Nadu government in May 2018. While India imported 44,245 tonnes of refined copper in 2017-18, the figure rose to 92,290 tonnes in 2018-19. The country, which had been exporting 50 per cent of its total copper production till 2018, became a net importer of the commodity after 18 years and spending Rs 14,000 crores in foreign exchange.

READ: From 1994 to 2020: Sterlite Copper's journey in Thoothukudi

The Vedanta-owned Thoothukudi plant alone was supplying 40 per cent of the country’s copper, while HINDALCO supplies around 38 per cent of the market demand, and Hindustan Copper accounts 10 per cent.

“It is also disheartening to note that at a time when our nation is forced to depend on hostile neighbours for copper imports, certain forces are conspiring to stifle our nation’s ability to be an independent copper manufacturer,” Pankaj Kumar, CEO, Sterlite Copper, said.

He told DH that the country would continue to import copper for the foreseeable future and lose in foreign exchange. “The imports will increase as the copper industry grows by 5 to 6 per cent every year and when normalcy is restored post-Covid, the demand will shoot up and our dependence on copper import will automatically go up,” he said.

Copper Consumers Association of South India treasurer Hemant K Mehta told DH that the news that Sterlite Copper will not reopen soon is “bad” since it would only increase the country’s dependence on import of copper from other countries.

“For the past two-and-a-half-years, we have been experiencing a shortage of copper and we have been importing copper in huge quantities from countries like South Korea and Japan. It is bad news especially because we are talking of self-reliance. How can we be self-reliant if our industries continue to remain closed?” he asked.

K E Raghunathan, Convenor of Consortium of Indian Associations (CIA), said the government could have imposed stringent rules on the company rather than shutting down the entire plant.

“We are now importing more than 40 per cent of copper that we need. Then how do we become self-reliant as Atmanirbhar is the most used phrase today. In case of Sterlite, they could have at least allowed the 160 MW power plant. Closing down an industry completely is like chopping the neck of a person instead of amputating his injured arm. Why chop the neck when the injury is only on the arm?” he asked.

The plant was also supplying Sulphuric Acid among other chemicals that are used to produce fertilizer and detergent products. After it shut down, major fertilizer manufacturers were forced to look for raw materials from other states and abroad.

"Sterlite Copper was supplying Sulphuric and Phosphoric Acid to several companies across the country. We had to depend on import of the chemicals to keep our factories afloat. So many companies had even scaled down production due to shutting down of Sterlite,” S Gurumurthy, Vice-President of Chennai-based Chemical Industries Association, told DH.