With Sterlite being denied permission to reopen its unit in Tamil Nadu, India is likely to depend on imports for refined copper for the foreseeable future.
Sterlite copper smelting plant in Thoothukudi in southern Tamil Nadu was one of major producers of copper in India. The state government ordered the closure of the 4-lakh-tonne refined copper plant in May 2018 on pollution ground and the facility has been shut since then.
In FY18 and FY17, domestic refined copper production stood at 848 thousand tonnes and 799 thousand tonnes respectively. Hindustan Copper, Hindalco and Sterlite are the major producers of refined copper in the country.
The closure of the factory has completely changed the copper industry’s landscape and has had a severe impact on the allied sectors.
India which exported about 50 per cent of its total copper production in FY18 turned into a net importer of copper and exports dropped in FY19.
In FY19, India’s refined copper production fell by a sharp 40 per cent to 457.2 thousand tonnes and in FY20, the estimated production was about 408 thousand tonnes.
In FY18, India imported 44,245 tonnes ($294.95 million) of refined copper and it increased to 92,290 tonnes ($605.20 million) in FY19.
Exports dip
Also, India’s exports of refined copper declined from 3,78,555 tonnes ($2,435.57 million) in 2017-18 to 47,917 tonnes ($302.27 million) in 2018-19, which has resulted in net imports of 44,373 tonnes in 2018-19 from a position of net exports of 3,34,310 tonnes ($2,140.62 million) in 2017-18, according to government data.
India is reported to be spending about ₹14,000 crore in forex to import copper. The closure also affected a lot of downstream sectors which were dependent on the Sterlite factory. Also, more than 3,000 employees and their families in Tamil Nadu have been affected by the closure.
Downstream domestic industry associations such as Chemical Industries Association and Winding Wire Manufacturers Association had highlighted the hardships small industries would face on account of the Sterlite unit closure. Over 100 small factories are using the by-products of Sterlite for their operations and existence.
Copper has a range of applications across all major sectors — construction, electric & electronic products, industrial machinery & equipment, transportation equipment & consumer and general products.