How did tuticorin plant closure affected Vedanta’s financial stability and people’s jobs?

Synopsis:- The 2018 shutdown of a 400,000-tonne copper smelter erased nearly 36% of domestic supply, led to losses of about $200 million, impacted over 20,000 jobs, and caused an estimated ₹14,700 crore economic hit, pushing India into copper import dependence.

The Tuticorin copper smelter wasn’t just another factory for Vedanta Limited it was the backbone of their copper business and a crucial pillar of India’s copper production. Understanding what this plant meant to the company reveals a story of ambition, economic significance, and ultimately, a costly loss.

An Industrial Giant

When the Sterlite Copper plant began operations in 1996 in Thoothukudi, Tamil Nadu, it quickly became India’s largest copper producer. The facility had capacity to produce 400,000 metric tonnes of copper annually, making it a powerhouse in the industry. This wasn’t just about copper production—the plant also manufactured sulphuric acid and phosphoric acid, making it an integrated industrial complex that served multiple sectors.

The numbers tell the story of its importance. The plant met 36 percent of India’s copper requirement, a staggering contribution that made Vedanta indispensable to the country’s infrastructure and manufacturing needs. Before the shutdown, India was actually a net exporter of copper, but after 2018, the country became dependent on imports for this critical metal.

Economic Impact and Employment

For Vedanta, Tuticorin was a massive economic asset. The plant contributed around Rs 2,500 crore to the state exchequer and provided direct employment to 5,000 people. But the real impact was much broader; another 25,000 people found work indirectly through the supply chain and related industries. When you consider the families dependent on these jobs, the plant supported hundreds of thousands of people’s livelihoods.

The facility also dominated regional markets. It held a commanding 95% market share for sulphuric acid in Tamil Nadu and generated 12% of Thoothukudi port’s revenue. These aren’t just statistics, they represent Vedanta’s deep economic integration into the region.

The Shutdown and Its Aftermath

Everything changed in May 2018 when the Tamil Nadu government ordered the plant’s permanent closure following environmental concerns and tragic protests where 13 people died in police firing. For Vedanta, this was devastating. Reports indicated the company faced losses of about $200 million in profits since the closure, and around 20,000 people lost their jobs directly or indirectly.

The company fought desperately through the courts to reopen the facility, approaching the National Green Tribunal and eventually the Supreme Court. They even attempted to sell the plant in 2022 when legal battles seemed futile. The Supreme Court’s final dismissal of their appeal in February 2024 effectively sealed the plant’s fate.

What Was Lost

For Vedanta, losing Tuticorin meant losing more than a production facility. It meant surrendering their dominance in India’s copper market and watching as the country shifted from being self-sufficient to import-dependent. The plant represented years of investment, established supply chains, and market leadership.

One study estimated the consolidated economic loss from the shutdown at approximately Rs 14,749 crore to the broader economy. For Vedanta specifically, it meant watching a key revenue stream disappear and dealing with stranded assets worth billions.

Conclusion

The closure of the Tuticorin plant dealt Vedanta a deep financial and operational blow. Losing a high-margin, large-scale asset weakened its stability, erased profits, and disrupted supply chains. Thousands of jobs vanished, hurting families and the regional economy. The shutdown ultimately reshaped Vedanta’s market position and India’s copper self-reliance.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.

The post How did tuticorin plant closure affected Vedanta’s financial stability and people’s jobs? appeared first on Trade Brains.