The plant, in Tamil Nadu, will start shortly, London-based Vedanta said on Wednesday in a Regulatory News Service statement. Last week, the company said it was waiting for environmental approval, a year after the Tuticorin plant was scheduled to start producing copper, used to make power cables.
The plant, which will replace an older and smaller smelter, will allow Vedanta to tap higher processing fees. The company is paid what are called treatment and refining charges to process ore supplied by mining companies.
These have doubled in 2005 to 22 cents a pound, said Marc Debrouwer, an analyst at Petercam SA in Brussels in a April 14 report.
Copper producers are increasing output to fill a shortfall, which JP Morgan Chase & Co said grew last year to 850,000 tonne. Global smelter capacity will rise 10% to 17.1 million tonne by 2008, the International Copper Study Group said yesterday. Shares of Vedanta rose in London by 6.5 pence, or 1.6%, as of 8 am local time to 425.3 pence. They have gained 8.4% this year, giving the company a market value of 1.2 billion pounds ($2.3 billion).