Anticipating a huge demand for copper in the global market, Sterlite Industries (I) Ltd, part of the UK-based Vedanta group, plans to double capacity of its Tuticorin plant in Tamil Nadu besides setting up a captive power project. This capacity expansion is in line with its strategy to become a low-cost producer.
The company on Thursday announced that it will be setting up a brownfield copper smelter project at Tuticorin with an estimated capacity of 4,00,000 tonne per annum (which, in effect, will double its capacity to 4,00,000 tonne per annum) along with two 80 MW captive power plants with an estimated investment of Rs 2,300 crore ($500 million).
Post this expansion, the company will be one of the largest single-location custom copper smelters in the world with a total capacity of 8,00,000 tonne per annum.
The new smelter will use the ISA smelt technology currently used at the Tuticorin smelter. The company reportedly owns a smelter-cum-mine at Zambia and a huge mine at Tasmania in Australia.
The capital investment includes the cost of smelter, refinery, captive power facility and other associated facilities such as sulphuric acid and phosphoric acid plants. The project will be funded through a mix of debt and internal accruals. The proposed project will be commissioned in mid 2011.
According to Ramesh Nair, chief operating officer, Sterlite Industires, “The project is adjacent to the existing plant in Tuticorin. We have acquired some land.”
It may be recalled that sometime back Sterlite (Vedanta group) chairman Anil Agarwal had announced a massive investment programme to the tune of Rs 10,000 crore across all metals, including copper, zinc and aluminum to be spent over next three to five years, for it to become a metal major in the world.
Nair said, “The global market is buoyant now. We see this as the right opportunity to expand in a major scale. Our objective is to become a low cost and a major producer of copper in the world.” Globally copper production is estimated to be around 18 million tonne per annum.
