Sterlite plant closure may lead to inflow of sulphuric acid from South Korea

Chennai, Sep 29 (Calcutta Tube) The closure of Sterlite Industries’ Tuticorin smelter plant is likely to result in increased inflow of sulphuric acid from South Korea and neighbouring Andhra Pradesh into Tamil Nadu and Kerala, say industry officials.

The Madras High Court Tuesday ordered immediate closure of the plant for violating various environmental laws and causing pollution.

Sterlite Industries is India’s largest non-ferrous metals and mining company and part of London-based Vedanta Resources, promoted by Anil Agarwal.

Industry circles expect the company to appeal against the order, but they also visualise various scenarios and their impact on sulphuric acid and copper prices.

An industry official of a chemicals company said in a scenario of Sterlite operating the plant at a lower capacity or plant closure, the prices of copper in the international market will increase due to the sucking out of Sterlite’s capacity.

As a result, there will be an increase in production of by-products like sulphuric acid and the possibility of increased inflows from outside the country and within are high.

‘As copper is the main product, overseas companies may increase their output. This would increase the supply of by products like sulphuric acid,’ the official said.

According to him, the sulphuric acid markets in Tamil Nadu and Kerala will witness increased inflow from overseas as well as from Andhra Pradesh.

‘Many units in Tamil Nadu- sulphuric acid as well as fertiliser units- stopped production when Sterlite started production at Tuticorin,’ he said.

The Tamil Nadu and Kerala market for sulphuric acid is estimated to be in the region of around 1,500 tonne per day (tpd), excluding the demand from fertiliser units.

Industry officials say the current sulphuric acid price ranges around Rs.3,500 per tonne.

Last fiscal, Sterlite Industries produced 1,036,000 tonnes of sulphuric acid. According to the company, the average net realistion last year was Rs.828 a tonne as against Rs.5,091 per tonne during 2008-09.

The industry officials say the fertiliser units that sourced sulphuric acid from Sterlite may have to start producing on their own if the smelter plant is shut down for a long time.

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