Vedanta unit stock tumbles as Indian court shuts smelter
Shares in an Indian unit of Britain-based resource giant Vedanta slid on Wednesday, a day after a court ordered the shutdown of a large copper smelter in the country's south due to pollution.
The ruling marked the latest bad news for India-focused Vedanta, owned by billionaire Anil Agarwal, which has been at the centre of controversy in the country in recent months over its environmental practices.
Last month, India's environment ministry rejected the firm's plans to mine bauxite in eastern Orissa state following fierce opposition by tribal villagers and environmental and human rights rights activists.
Shares in Vedanta's subsidiary, Sterlite Industries, were down 7.31 percent at 163.60 rupees in afternoon trade on the Mumbai stock exchange after Tuesday's ruling by the Madras High Court.
The court ordered the immediate closure of the 400,000 metric ton Tuticorin copper smelter in Tamil Nadu state for causing "unabated air and water pollution."
It said the smelter had polluted areas close to the bio-diverse Gulf of Mannar national marine park and there were large amounts of heavy metals, arsenic and other toxic chemicals in the ground water.
The ruling was the latest sign of a new determination by India to improve its green track record as concerns mount about the impact of industrialisation on air quality, forests, wildlife and air quality.
The court order against Sterlite, whose copper business logged 2.8 billion dollars in revenues last year, followed a petition from environmental activists and political groups challenging environmental clearance given to the plant.
Sterlite said it had complied with all "necessary rules and regulations" since it was opened in 1996.
"The company is awaiting full text of the order" to decide on its next step, a spokesman said.
The judgement comes as New Delhi considers a plan by Vedanta to buy a controlling stake in Cairn India, a unit of Edinburgh-based Cairn Energy.
Vedanta has announced an offer worth up to 9.6 billion dollars for the stake in Cairn India, whose biggest asset is the oil-rich Mangala field in the western state of Rajasthan.
© 2010 AFP