By Anupama Chandrasekaran
CHENNAI (Reuters) - India's largest copper smelter will remain shut for now as a local environmental court transferred a case over complaints about emissions to New Delhi, extending a month-long closure at the facility that meets half of the country's copper demand.
The smelter, run by Sterlite Industries , was closed on March 30, sending waves through the copper market by pushing about 3,000 tonnes per day of concentrates onto the market and sending fees to process to a five-month high in Asia.
Justice M. Chockalingam of the National Green Tribunal said "circumstances did not permit" hearing the case in the southern bench of the fast-track court as had been scheduled. He did not elaborate.
Output at the Tuticorin facility, which produces about 30,000 tonnes a month, half of which is exported to China, was halted after local residents complained of emissions that resulted in breathing problems.
"The process will have to start afresh. This is unfortunate for the judicial system," said Abdul Saleem, lawyer for the Tamil Nadu Pollution Control Board, the local pollution-control body. "We don't know the reasons for the transfer."
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Traders had expected the smelter to get clearance to reopen, albeit with conditions. An expert panel inspected the facility and was to report back to the court on Monday.
However, the judge said the report would be sent, still sealed, to the New Delhi court. It was not known when that hearing would begin.
Sterlite, which also produces zinc, lead and silver, said it was disappointed.
"We expected some result today," said P. Ramnath, chief executive of Sterlite's copper business.
The company has said the high emission readings occurred when workers recalibrated sensors during maintenance.
PREMIUMS SEEN EDGING HIGHER
Sterlite, a unit of London-listed Vedanta Resources Plc , had declared force majeure on copper deliveries and concentrate purchases after the closure of the plant.
The halt in concentrate purchases by Sterlite had led to an oversupply in Asia, resulting in a surge in treatment and refining charges (TC/RCs).
Copper premiums in Singapore hit a near one-year high early this month, partly fuelled by Sterlite's halt, and have since steadied near 10-month highs. Premiums were unchanged on Monday.
"It's possible that you might not see a market reaction immediately until the Delhi court sets a date," said a source at a trading house in Singapore. "Premiums might go up, just a little, but I still think (the smelter) will reopen sooner rather than later."
Sterlite has been waiting for environmental and other approvals to double the capacity of the smelter to 800,000 tonnes per year. The smelter has been operating since 1996.
It has long been the target of protesters and India's top court earlier this month fined Sterlite about $18 million for breaking environmental laws at the site in Tamil Nadu.
Earlier in April, Sterlite's bauxite mining plan was again held up for environmental checks after the Supreme Court maintained a ban on the practice in the eastern state of Odisha.
The bauxite project is one of several big-ticket investment plans enmeshed in environmental and other concerns. These range from a $12-billion steel plant planned by South Korea's POSCO to Sterlite's plan to double capacity at its copper plant.
(Writing by Krishna N Das; Editing by Jo Winterbottom and Amran Abocar)