Meanwhile, for the 9 months ended December 2017, the company had stated that the production volume from the Tuticorin smelter stood at 297,000 tonnes of cathodes.
A prolonged shutdown of Vedanta’s Indian copper smelter would be credit negative and increase leverage marginally, credit ratings firm Moody’s said on Monday. Last Tuesday, UK-based Vedanta Resources announced that the Tamil Nadu Pollution Control Board rejected the company’s application to renew its right to operate its copper smelting facility in Tuticorin, India. The facility has been shut down since March 27, when it began a 15-day scheduled maintenance turnaround.
During October-December 2017, Vedanta’s Tuticorin smelter produced 101,000 tonnes of cathodes, which was stable on a year-on-year basis and 5% lower quarter-on-quarter due to an unplanned shutdown of around 8 days during the quarter on account of a boiler leakage. Meanwhile, for the 9 months ended December 2017, the company had stated that the production volume from the Tuticorin smelter stood at 297,000 tonnes of cathodes. The smelter is expected to produce around 400,000 tonnes of cathodes during FY18.
Vedanta owns one of the two custom copper smelters in India and, according to International Copper Association (India), had a 33% market share by sales volume in fiscal 2017, which ended March 31, 2017. The other major custom copper smelter in India is operated by Hindalco Industries. How long the Tuticorin copper facility will be shut is not known. “If we assume Vedanta’s consent-to-operate license is not renewed for one year, the company’s pro forma revenue for calendar year 2017 would decline 25% to $10.8 billion from $14.4 billion, and its reported Ebitda would decline 5% to $3.6 billion from $3.8 billion,” Moody’s said.