April 05 2020
Sterlite closure: downstream units await SC ruling today
18 February 2019

Many units have shut down following copper shortage

The Supreme Court’s decision on a batch of appeals against an order by the National Green Tribunal directing reopening of Sterlite Copper at Thoothukudi is awaited with more than customary interest by a host of downstream units, especially the electrical and telecom industries.

The apex court is expected to give verdict on the appeals on Monday. The consumption of refined copper is estimated at about 6.5 lakh tonnes. Electrical industry accounts for about 40% of copper consumption, followed by wire and cable which account for 28%. “The growth of the copper industry is highly dependent on the demand for products such as power and telecommunication cables, transformers, generators, radiators and other ancillary components. Hence, its growth is closely linked with the country’s economic and industrial growth,” said an industry source.

The share of electrical and telecom industry in total consumption is 56%. This is followed by transport (8%), consumer durables (7%), building and construction (7%), general engineering goods (6%) and others (16%).

Since the closure of the Sterlite unit, consuming units have been forced to rely on costlier imports. Some have also been forced to scale down operations or even shut shop due to the copper shortage.

The consuming units are under tremendous pressure especially since the closure of the Sterlite unit. Many a consuming unit has been forced to rely on costlier import for its copper needs. Instances are also aplenty where downstream units have either been forced to scale down operations or shut down completely in the wake of copper shortage.

“Import of copper cathode, rods and wires is expected to increase over 40%,” an industry source said.

“FDI in telecom helped raise teledensity from 0.4%-9% in the last 10 years. This success will create a huge opportunity for copper in the last mile in the form of structured wiring and coaxial cables in India,” a telecom source said. In fact, two of the country’s major telecom majors units — BSNL and MTNL — consume 10% of the copper production. Given this, the industry is hoping that Supreme Court verdict will break the logjam in the Sterlite imbroglio.



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