Sterlite copper smelter stays shut, court case continues

 India's largest copper smelter will remain shut until at least May 16, when a court hearing will resume into complaints of emissions from the plant.

The facility meets half of India's demand for the metal, and a near seven-week closure at the plant has tightened supply of refined copper and driven up prices to industry. The plant produces 30,000 tonnes of refined copper a month and nearly half of the output goes to China.

Justice Swatanter Kumar of the National Green Tribunal, a fast-track environmental court, said on Tuesday the court would continue with the case on Thursday, after arguments both on the validity of the closure and on the remit of the court.

The Sterlite Industries plant was shut on March 30 after residents complained of emissions that led to breathing problems.

The case was transferred to New Delhi from a south Indian branch of the court on April 29.

Traders said there had already been huge demand for copper rods from India.

"For the last few weeks, it's been roaring business. The import premiums are possibly in the range of $150-160 up from $135-140 around a month ago," said a Singapore-based trader, who added a delay in re-opening could push up premiums further.

Supply has been further tightened by the shutdown of another big copper smelter for scheduled maintenance. Hindalco Industries' Birla smelter, with similar output, was shutdown on May 7, a company source said on Tuesday.

Most of India's copper exports go to China, the world's biggest consumer of the metal, which used up about 9 million tonnes last year -- vastly more than India's annual consumption of around 600,000 tonnes.

Cashing in on regional oversupply after the Sterlite closure, last month smelters across Asia were charging the highest fees in five months to process concentrates.

Sterlite, a unit of London-listed resources conglomerate Vedanta Resources Plc, controlled by billionaire Anil Agarwal, has been awaiting clearances to double the capacity of the smelter to 800,000 tonnes a year.

The smelter in the coastal town of Tuticorin near the southern tip of India has long been the target of protesters and politicians who say it is a risk to the local fishing industry.

Various cases have been filed against the company since it started operating the plant in 1996.

In a different case, the Supreme Court last month fined Sterlite about $18 million for breaking environmental laws at the smelter.