This has dealt a heavy blow to downstream copper products makers such as copper wire makers and motor manufacturers, for whom raw material cost makes for a lion’s share of their total cost of production.
“Valuable foreign exchange is going out of the country and our cost of production has increased by about 1%, but even a 1% increase amounts to a lot in downstream manufacturing since more than 90% of our cost is incurred on raw materials,” said Shyam Sundar Rathi, chairman of Vidya Wires — a local manufacturer of copper wires.
Rathi said even with a slight slowdown in demand for the metal in the past 3-4 months, there is still a shortfall of supply.
A research report by Care Ratings said domestic production of refined copper grew at a compound annual growth rate (CAGR) of 9.6% between 2013-14 and 2017-18. But with the closure of Sterlite’s 400,000-tonne copper plant in Tuticorin, output fell by 46% during the year 2018-19 as Sterlite accounted for 40% of the country’s copper smelting capacity.
During the year, production of the other two manufacturers — Hindalco and Hindustan Copper — also fell due to planned shutdowns by the companies. Until last year, with a total capacity of around 800,000 tonnes shared primarily between Hindalco and Vedanta, the country was a net exporter of the metal that is used the most in the electrical industry, followed by building and construction and transport industries.
To be sure, since Sterlite’s plant shutdown, the country’s import of copper ore or concentrate has also come down by an equal measure — by about 45% last year. Domestic manufacturers import copper ore and refine it into copper cathode. Meanwhile, Vedanta has put Sterlite Copper’s expansion plans on hold. Pankaj Kumar, CEO of Sterlite Copper, told ET that the expansion plans of the company have been stalled at the moment. It is also not looking at a different site for the plant as of now.
“All efforts right now are directed towards reviving the plant. We are educating the local community in Tuticorin about the plant and they are coming to realise the detrimental impact of the closure on employment and livelihood,” said Kumar. The Chennai HC is expected to take the matter up for hearing in the first week of December, he said.
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16 Comments on this Story
aaaa bbbb400 days ago
What an amazing achievement - one more record for modi - keep up the great records
Rameshwar Singh Thakur401 days ago
The nefarious elements duly supported by the Church have succeeded in making India again resort to imports. The nation has to fight these forces.
V N401 days ago
This report is sheer idiocy and a totally deceitful statement with a view to mislead the government as well as the public. The smelter imported copper ore and extracted copper from the ore by causing significant pollution in the process. We are now importing copper metal instead of importing copper ore. The only difference is that a few hundred jobs have been lost but many thousands of lives have been saved due to absence of pollution from the gases emitted from the smelter.