On 20 December 2024, the Indian National Trade Union Congress (INTUC), the age-old workers’ union of Congress, held a protest in Chidambaranagar, calling on the state government to reopen the Sterlite Copper plant in Thoothukudi and to focus on increasing employment opportunities in the region.
Over 500 individuals, led by INTUC Working President Kathirvel, participated in the demonstration, calling for the reopening of the defunct Sterlite Copper plant and highlighting the need for job creation. Protesters held placards demanding the enactment of special legislation to reopen the facility, which was shut down following Supreme Court orders.
Kathirvel, who also serves as the General Secretary of the National Harbour Workers’ Union and a trustee of the VOC Port Trust, stated that the closure of several industries, including Sterlite Copper, has negatively impacted employment prospects and the socio-economic development of Thoothukudi’s residents. He argued that shutting down industries sends a negative signal to investors and harms the local industrial environment.
He further pointed out that the closure of spinning mills, textile mills, ginning factories, thermal power plants, warehouses, and small-scale industries over the past decade has led to a significant loss of jobs for both skilled and unskilled workers. He noted that the automation at VOC Port had replaced the jobs of 7,000 manual laborers, while the reduction in salt pan areas had particularly hurt women’s employment opportunities.
Kathirvel also referenced MP Kanimozhi’s parliamentary appeal to the central government for the establishment of semiconductor manufacturing units in Thoothukudi, which she believes would aid in the region’s economic recovery.
He argued that the permanent closure of the copper smelter had disrupted the livelihoods of 3,000 truck drivers and 4,000 daily wage laborers. The plant had been generating Rs 5,000 crore annually for both the union and state governments, while supplying 40% of the country’s copper. He warned that shutting down the smelter would force India to become a net importer of copper after 18 years.
Kathirvel acknowledged Chief Minister MK Stalin’s efforts toward decentralizing industrial development across the state and supported MP Kanimozhi’s call for new industries in Thoothukudi. He urged the state government to reconsider the reopening of the copper plant.
Impact Of Sterlite Copper Plant Closure On Indian Economy
The closure of the Sterlite Copper plant in Thoothukudi, Tamil Nadu, in May 2018 has had significant economic ramifications, with estimates indicating a loss of over ₹14,000 crore to the Indian economy. According to a report by Consumer Unity & Trust Society (CUTS) International, this figure, which translates to nearly $2 billion, reflects the cumulative losses experienced by various stakeholders, including the government, state, ports, and investors. The loss amounts to approximately 0.72% of Tamil Nadu’s State Gross Domestic Product (SGDP) for the four-year period of the plant’s closure.
The closure did not only affect the company, Sterlite Copper, which reportedly faced a loss of ₹4,777 crore, but also had widespread consequences for the Indian economy. While the precise distribution of the company’s losses is unclear, the closure has also resulted in substantial revenue losses for both central and state governments, particularly in terms of taxes and duties. A separate report commissioned by NITI Aayog examined the broader economic impact, which included significant reductions in tax revenue.
Impact On Copper Production And India’s Trade Balance
Before its closure, Sterlite Copper was responsible for producing 40% of India’s copper. The plant’s shutdown marked a significant shift in India’s copper trade balance, turning the country from a net exporter to a net importer of copper. The closure has had a profound effect on the country’s ability to meet domestic copper demand, with India’s copper exports plummeting by 70% following the plant’s closure. Notably, India, which had been one of the top five copper exporters globally, saw its exports drop dramatically from 378,000 tonnes in 2017–2018 to just 48,000 tonnes in 2018–2019.
China’s Gain And Challenge To India’s Atmanirbhar Bharat
China, a major global player in copper production, emerged as one of the biggest beneficiaries of India’s copper shortage, with its copper exports to India doubling. This shift has been detrimental to India’s Atmanirbhar Bharat initiative, as copper is critical for industries ranging from electricals to automotive manufacturing. With copper demand set to rise due to the growing electric vehicle (EV) market, renewable energy push, and rapid urbanization, India faces significant challenges in meeting its future copper needs.
Rising Copper Demand And India’s Future Needs
As per estimates, copper demand in India is expected to grow by over 9.3% annually, reaching around 2.5–3.5 million metric tons by 2030. This demand will be driven by industries such as renewable energy, electric vehicles, and power grid expansion. For instance, electric vehicles (EVs) require substantial quantities of copper, with each EV car using approximately 83 kg of copper, and EV buses requiring 224 kg. As India aims to achieve 30% EV penetration by 2030, the demand for copper will soar. Additionally, with the government’s focus on increasing solar and wind energy capacity, copper’s role in energy production and transmission will be crucial.
The Shift In Investment: India To Saudi Arabia
The prolonged closure of the Sterlite Copper plant has led Vedanta, the parent company, to reconsider its investment strategy. With repeated denials for reopening the plant, Vedanta has decided to invest in copper projects abroad, particularly in Saudi Arabia. The company has signed a memorandum of understanding (MoU) to invest $2 billion in establishing copper smelting and refining facilities in the country. This shift represents a significant blow to Thoothukudi’s economy and India’s industrial prospects, as Vedanta’s investment in Saudi Arabia is expected to contribute $19 billion to Saudi Arabia’s GDP.
Allegations Of Foreign Influence On Protests
The protests leading to the closure of the Sterlite Copper plant have raised questions about foreign involvement. Allegations have been made that foreign-funded entities, including Chinese companies with vested economic interests in India’s copper imports, played a role in inciting protests against the plant. These protests were reportedly supported by NGOs and other groups that violated the Foreign Contribution Regulation Act (FCRA) by accepting foreign funds, even after their FCRA registrations were canceled. This has further complicated the issue, as it suggests that external influences may have contributed to the economic damage caused by the plant’s shutdown.
Locals are now protesting to reopen Sterlite Copper plant due to job loss
Close to 50,000 people lost their Job after closure of the plant in 2018
India suffered 2 billion revenue loss and become depended on China for copper import for Electric Vehicle and other Green Energy… pic.twitter.com/SbHTjuJDEL
— Hindutva Knight (@HPhobiaWatch) December 23, 2024
Similar to protests seen in other parts of the world, such as the Carmichael coal mine in Australia, opposition to the Sterlite plant was driven by ‘environmental’ concerns. However, the lack of swift resolution by state and national bodies resulted in economic losses for India. The closure of Sterlite Copper, which had been an important part of Thoothukudi’s industrial ecosystem, is seen as a case of missed opportunities for balanced decision-making.
The closure of the Sterlite Copper plant has had far-reaching economic consequences for India, both in terms of lost employment opportunities and reduced copper production. As the country struggles to meet rising copper demand, the closure has shifted the balance of trade, with China and other countries reaping the benefits. Moving forward, India must prioritize the revival of its copper industry to ensure it remains competitive in the global market and meets its growing demand for this essential metal.
(With inputs from TNIE)
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