India Court allows Sterlite smelter to resume production #WTFnews


Read more on: INDIA | STERLITE | SMELTER | Court | Delhi | Imports | Sterlite Industries | New Delhi

By Krishna N Das

NEW DELHI (Reuters) – India’s largest copper smelter is likely to restart within a week, after a court on Friday gave a conditional go-ahead, ending a two-month-long shutdown that has squeezed domestic supply and boosted imports.

The smelter run by Sterlite Industries , a unit of London-listed Vedanta , can resume operations overseen by a court-appointed panel, Justice Swatanter Kumar of a fast-track court, the National Green Tribunal, said.

“A balance has to be struck between environmental interests and sustainable economic development,” the judge said, adding that the panel would determine if the smelter required additional anti-pollution equipment.

The court will issue a final order after July 10, he added, to follow Friday‘s interim order.

Sterlite’s smelter is expected to resume production in about a week, a company statement said. Earlier, the head of its copper business P. Ramnath had suggested a restart in two weeks, with supply to customers commencing in another week.

The smelter, which uses imported concentrates, produces 30,000 tonnes of refined copper a month, or more than half of India’s total production. Nearly half its output goes to China.

Its closure had made available to the market an extra 3,000 tonnes of copper concentrates each day.

“If the closure had been prolonged for some more time it would have led to a steep increase for premiums,” said a physical trader based in Singapore, who has Indian clients. “Already we had started getting copper cathode enquiries.”

Most of India’s exports of copper go to China, the world’s biggest consumer of the metal, which used around 9 million tonnes last year, well in excess of India’s annual consumption of around 600,000 tonnes.

“The restart will ease the tight supply situation across Asia, but particularly in India, where the domestic market has been suffering because of a shortage in cathode,” said another metals trader based in Singapore.

The shutdown of the Sterlite smelter helped drive up copper premiums, which rose in Shanghai to a high of $140 a tonne over cash London Metal Exchange copper, the trader added.

A long-arranged shutdown of Hindalco Industries Ltd’s Birla smelter on May 7 also cut tonnage to the market. That smelter, which produces around 30,000 tonnes a month, will reopen early in June, the company has said.

India’s cable makers faced a severe shortage of copper and potential manufacturing delays after the closure of the country’s two biggest copper smelters.

Sterlite, whose parent Vedanta is controlled by billionaire Anil Agarwal, has been waiting for government clearances to double the capacity of its smelter to 800,000 tonnes a year.

Its smelter, in the coastal town of Tuticorin near the southern tip of India, was shut on March 30 after residents complained of emissions that led to breathing problems.

Environmental issues and other concerns, including land acquisition, have enmeshed several global companies’ plans for big-ticket investments in India, ranging from South Korea’s POSCO to units of Vedanta.

Sterlite’s smelter has long been the target of protesters and politicians who call it a risk to local fisheries.

Several cases have been filed against the company since the plant started in 1996. In a different case, India’s top court last month fined Sterlite about $18 million for breaking environmental laws at the smelter.

(Additional reporting by Manolo Serapio Jr. and Melanie Burton in SINGAPORE; editing by Clarence Fernandez and Keiron Henderson)

Vedanta- Social Media Campaign ‘ Khushi’ – Faking Happiness #CSR


Kamayani Bali Mahabal- April 17,2013  for Faking Happiness Campaign

Vedanta Resources plc is a London listed FTSE100 company which has brought death and destruction to thousands. 63% of it is owned by billionaire Anil Agarwal and his family through companies in various tax havens. It has been consistently fought by people’s movements but it is being helped by the British government to evolve into a multi-headed monster and spread across India and round the world, diversifying into iron ore in Goa, Karnataka and Liberia, Zinc in Rajasthan, Namibia, South Africa and Ireland, copper in Zambia and most recently oil in the ecologically fragile Mannar region in Sri Lanka.

Vedanta’s Record in India:

In Odisha, India:

Vedanta’s bauxite mining and aluminium smelters have left more than tenthousand displaced people landless, contaminated drinking water sources with ‘red mud’ and fly ash,and devastated vast tracts of fertile land in an area which has seen famine every year since 2007.Vedanta’s mine on the sacred Niyamgiri hills has been fought by Adivasi (indigenous)-led people’smovements for seven long years and has so far been stopped. This has rendered their subsidiaryVedanta Aluminium (VAL) a loss making company, starving it’s refineries at Jharsuguda and Lanjigarhof local bauxite.

In Goa:

Vedanta’s Sesa Goa subsidiary has been accused of large scale fraud and illegal mining.In June 2009 following a pit wall collapse which drowned Advalpal village in toxic mine waste, a 9year old local boy Akaash Naik filed a petition to stop the mine and mass protests later that yearhalted mining at one of Sesa Goa’s sites. In 2011 there were more major mine waste floods. In SouthGoa a 90 day road blockade by 400 villagers succeeded in stopping another iron ore mine. Sesa Goaare paying ‘silence funds’ to try and prevent similar action at their South Goa mine.

In Tamil Nadu, Tuticorin:

Vedanta subsidiary Sterlite has flouted laws without remorse, operatingand expanding without consent, violating environmental conditions, and illegally dumping toxiceffluents and waste. In 1997 a toxic gas leak hospitalised 100 people sparking an indefinite hungerstrike by a local politician and a ‘siege on Sterlite’ that led to 1643 arrests. Later that year a kilnexplosion killed two. An estimated 16 workers died between 2007 and 2011. Police recorded mostworkers deaths as suicides. Pollution Control Boards, judges and expert teams have on severaloccasions reversed damning judgements of the company, demonstrating large scale corruption andbribery. Activists are waging a court battle which has stopped operations for several short periods.

In Tamil Nadu, Mettur:

Vedanta bought MALCO ‘s aluminium complex at Mettur 2 yearsbefore permission for their Kolli Hills bauxite mines expired but continued to mine illegally for 10years. Five adivasi villages were disturbed and a sacred grove destroyed before activist’s petitionsstopped mining in 2008. Without local bauxite and with protests preventing bauxite coming fromNiyamgiri in Orissa the factory at Mettur was also forced to close. However, the abandoned andunreclaimed mines continue to pollute the mountains and a huge red mud dump by the Stanleyreservoir pollutes drinking water and blows toxic dust into the village.

In Chhattisgarh, Korba:

Vedanta bought the state owned BALCO’s alumina refinery, smelter andbauxite mines for ten times less than its estimated value in 2001 despite a landmark 61 day strike byworkers. Since then wages have been slashed and unionised workers are losing jobs. In 2009 afactory chimney collapsed, BALCO claimed 42 were killed, but in fact 60 – 100 people are stillmissing. Witnesses claim these workers from poor families in neighbouring states are buriedunderground in the rubble, which was bulldozed over immediately after the collapse

British Government’s special relationship with Vedanta

• The UK’s Department for International Development (DfID) and Department of Tradeand Industry (DTI) helped launch Vedanta on the London Stock Exchange andcontinues to support the company.
• Through the World Bank funded NGO Business Partners for Development, it hashelped Vedanta take over copper mines in Zambia . Although Vedanta has been finedfor poisoning the Kafue river and faced workers protests, the UK is helpingestablish it in Zambia by securing in the words of local NGOs “ a ‘champion’ withincentral government to further the ‘enabling environment’”.
• Meanwhile in Liberia in what has been described as one of the worst recordedconcession agreements in the country’s history Sesa Goa is accused of breach ofcontract and may have to pay damages of US$10 billion.
• Most recently when the Indian government held up Vedanta’s deal with EdinburghbasedCairn Energy by investigating Vedanta’s ability to manage strategic oil fields, UKgovernment officials, briefed “over dinner” by Cairn Energy, offered to “polish” and senda letter drafted by the company to the Indian Prime Minister to force the deal through.David Cameron even personally intervened, urging India to speed up’unnecessary delays’. As a result the Indian government caved in and allowed a dealwhich handed some 30% of India’s crude oil for a fraction of its worth to this notoriouscorporate.
• Vedanta’s Cairn India is now drilling for oil in the ecologically fragile off-shoreregion around Mannar in Sri Lanka – an area controlled by the Sri Lankan military.

Vedanta Resources,  is attempting to claim to be social responsible via a huge advertising campaign. The latest is the  social media campaign, ‘Khushi’, aimed at underprivileged children, is poised to complete one year. Launched on April 10, 2012. In this video we attack all tall claims of Vedanta Khushi Campaign.

The Reality is –

Vedanta has suffocated the life of Adivasis in Niyamgiri foothills. The entire area is overlapped with Red Mud. Most of humans, animals, birds and insects are infected with skin diseases. Proper medical facilities are unavailable; there is no sign of hospital. By pressures, by vicious means, by force, by paying less, Vedanta bought the farming and forest land of Local tribes. They cheated them by providing technical training to make them skillful workers in Vedanta Mines and factories, as soon as land got transferred, Vedanta thrown them out.

Red mud has converted all crop fields and forest into waste land, the vein is spreading. The river Vasamdhara is the main source of water for all constituents of habitats in Niyamgiri. Vedanta’s Red Mud resulted in converting drinkable water of Vasamdhara to polluted and toxic waste; it is causing dangerous skin diseases and cancer. Even Animals and birds are rejecting it to drink. The situation of Vasamdhara is same from Niyamgiri till KalingapatnamAmnesty International broke this harsh truth.

Niyamgiri foothills is a treasure of bauxite, Bauxite is a main component to make aluminum. According to statistic, Niyamgiri foothills contain 72 lakh million ton of bauxite. The average cost of 1 ton bauxite is approx 6500 INR, whereas all 72 lakh million ton is not awarded to Vedanta for mining. The prices are fixed very little, when Government awards a license to mine, it is simple to understand the covetous intentions of Vedanta by looking at the history and biology of Vedanta.

Government and Vedanta has fixed the price of Niyamgiri foothills, the predators have camped and pasted like a woodworm. Vedanta Aluminum Ltd is camped with crooked intentions in Laljiganj located at south Odisha . A fake kingdom of 700 Hectares expanded by cheating legally and eating illegally, hooks or crook they used every evil outfit.

Village Bundela initiated the revolution against Vedanta few years back, many voices were raised, and dozens of revolutionaries are martyred. There are few Tribal’s if they further replaced from this areas, they will lose their name from World map. They are already on the way of extinction because of Vedanta what a Price tag we have placed on forest and tribes in this materialistic world. We are the silent observer of slaughter of Humanity.

JOIN US FAKING HAPPINESS CAMPAIGN

https://www.facebook.com/groups/fakinghappiness/

#India- National Green Tribunal says panel will inspect Sterlite’s Tuticorin plant


The members of the committee to inspect Sterlite’s copper smelter will be decided on 18 April
S. Bridget Leena, Livemint.com
First Published: Fri, Apr 12 2013. 09 32 PM IST
The Tamil Nadu Pollution Control Board ordered the closure of the Tuticorin plant, which produces more than 300,000 tonnes of the metal a year, on 29 March after local residents complained about noxious emissions. Photo:
The Tamil Nadu Pollution Control Board ordered the closure of the Tuticorin plant, which produces more than 300,000 tonnes of the metal a year, on 29 March after local residents complained about noxious emissions. Photo:
Chennai: The national green tribunal on Friday said it will constitute a committee to inspect the country’s largest copper smelter, run bySterlite Industries (India) Ltd.
The members of the committee will be decided on 18 April, said judicial member M. Chockalingam and expert member R. Nagendranof the national green tribunal.
The Tamil Nadu Pollution Control Board ordered the closure of the plant—which produces more than 300,000 tonnes of the metal a year—on 29 March after local residents complained about noxious emissions.
Sterlite, a unit of London-listed resources conglomerate Vedanta Resources Plc., has said the plant’s emissions are within permissible limits.
On 1 April, Sterlite filed a petition with the national green tribunal challenging the order of the state pollution control board.
The committee will inspect and assess the state of the copper plant. It will give its report on or before 29 April. Only after the findings of committee are presented will the tribunal decide on the re-opening of the plant, Chockalingam said.
The unit should be open for monitoring but it can’t start resume commercial production, the tribunal said.
During the proceedings on Friday, the judicial member asked why the pollution control board waited for more than a week to shut the plant if it found toxic amounts of sulphur dioxide were released between 2am and 11am on 23 March.
The Supreme Court last week fined Sterlite Rs.100 crore for polluting the environment but set aside a 2010 directive of the Madras high court to permanently close the Tuticorin smelter on grounds of environmental concerns.
The apex court said its judgement would not stand in the way of the matter regarding the emissions.
Vaiko, general secretary of the Tamil Nadu-based political party Marumalarchi Dravida Munnetra Kazhagam, is one of three entities supporting the state pollution watchdog’s order to shut the Sterlite plant.
Sterlite shares ended unchanged at Rs.88.50 on BSE on Friday, while the benchmark Sensex fell 1.62% to 18,242.56 points.

 

Bombay HC approves Sterlite Industries merger proposal, but ball is in Madras HC


Press Trust of India | Updated On: April 03, 2013 15:44 (IST)
New Delhi: Sterlite Industries (India) Ltd today said the Bombay High Court has approved the merger of the mining firm with Madras Aluminium Company, Sterlite Energy Ltd, Vedanta Aluminium and Sesa Goa.

“The Honourable High Court of Bombay…approved the scheme of amalgamation and arrangement amongst Sterlite Industries (India) Ltd, Madras Aluminium Company Ltd, Sterlite Energy Ltd, Vedanta Aluminium Ltd and Sesa Goa Ltd and their respective shareholders and creditors to create Sesa Sterlite,” the company said in a filing to BSE.

However, the merger is subject to approval of Madras High Court, it said.

“The scheme is also subject to approval of the Honourable High Court of Madras, wherein the hearings have been completed and the order is awaited,” the statement said.

Sterlite Industries (India) is a leading metal and mining firm which produces aluminium, copper, zinc, lead, silver and commercial energy.

Besides India, the company has operations in countries like Australia, Namibia, South Africa and Ireland.

MDMK to challenge Supreme Court order on Sterlite – seriously ?


MDMK leader Vaiko addressing the media outside the Supreme Court in connection with the Sterlite Industries issue, in New Delhi on Tuesday. Photo: S. Subramanium
S_SubramaniumMDMK leader Vaiko addressing the media outside the Supreme Court in connection with the Sterlite Industries issue, in New Delhi on Tuesday. Photo: S. Subramanium

MDMK on Tuesday said that it would challenge the Supreme Court’s order asking Sterlite Industries, a subsidiary of UK-based Vedanta Group, to pay Rs. 100 crore as compensation for polluting the environment and vowed to continue its fight against restarting the operations.

The Apex Court, while directing Sterlite to pay the amount as compensation, had, however, refused to direct its closure.

“We are staging a battle and we will continue to do so. I will file an appeal in the Supreme Court”, a party statement quoted Vaiko as having told reporters in New Delhi.

The MDMK leader recalled that Maharashtra had cancelled the license of Sterlite Industries plant in Ratnagiri district a few years ago after villagers damaged the facility. “In Tamil Nadu we did not indulge in such activities. We are fighting for peace in a non-violent way.”

People’s suffering

Alleging that a large number of people were affected by cancer and other diseases and thousands of acres damaged due to the pollution from the plant, Mr. Vaiko sought to know why lives of the local people should be endangered just to bring revenue to the Government (through the plant).

He claimed that Supreme Court’s order would not control the closure notice given by the Tamil Nadu Pollution Control Board on March 30.

The Apex Court had refused to direct closure of the plant and had set aside the Madras High Court’s 2010 order on closing it down.

 

DOWNLOAD FULL JUDGEMENT HERE

#India- Supreme court fined Sterlite 1 billion rupees for breaking green laws #goodnews


A labourer works inside a copper workshop in Siliguri June 6, 2009. REUTERS-Rupak De Chowdhuri-Files

A labourer works in a factory at Bharibramna, 20 km (12 miles) west of Jammu, July 15, 2008. REUTERS-Amit Gupta-Files
NEW DELHI | Tue Apr 2, 2013 2:59pm IST

(Reuters) – The Supreme Court has fined Sterlite Industries (India) Ltd 1 billion rupees for breaking environmental laws at its copper smelter in Tamil Nadu. The case is unrelated to a separate order that has shut the 300,000 tonnes per year Tuticorin plant, India’s largest, since last week following complaints of a gas leak. Despite imposing the fine, the Supreme Court overruled an earlier order from the Madras High Court demanding the firm close the plant over longstanding environmental concerns. That disputed order was handed down before the gas leak forced the smelter’s immediate closure. “We have to see that no person or society would be adversely affected by environmental hazards,” said judge A.K. Patnaik, who headed the bench. The money must be deposited within two months, he said. On Monday, the company said the Tamil Nadu Pollution Control Board (TNPCB) had ordered it to shut the plant after local residents complained of breathing problems. Sterlite, a unit of Vedanta Resources PLC (VED.L), has for years been involved in legal battles over environmental concerns at the Tuticorin smelter, with the first of many petitions against it filed in 1996. “Sterlite Industries would continue to work in close association with the State Government of Tamil Nadu and other regulatory bodies, towards maintaining highest standards of Health, Safety and Environment,” the company said in a statement. India consumes around 600,000 tonnes of copper annually – about 3 percent of the world’s total, far behind China which used around 9 million tonnes last year. Shares in Sterlite rose more than 3 percent on Tuesday in a firm Mumbai market. (Reporting by Suchitra Mohanty and Siddesh Mayenkar; Editing by Daniel Magnowski)

 

Relief marks shutting of #Vedanta unit #goodnews


31 March 2013

shivani chaturvedi, Statesman

CHENNAI, 31 MARCH: The closure of the Thoothukudi unit of Sterlite Industries yesterday has brought great relief to environmental activists of Tamil Nadu and residents of Thoothukudi (formerly known as Tuticorin).

The copper smelter plant owned by Sterlite Industries has affected the livelihoods of the fishermen, farmers and other sections of the population through unprecedented level of pollution.

Mr Vaiko, the leader of the MDMK, has been campaigning for the closure of this polluting unit since 1997.

The closure of the Thoothukudi unit of Sterlite Industries comes just two days before the apex court is to deliver its verdict on an appeal filed by the Sterlite Industries challenging the 2010 order of the Madras High Court directing the closure of the unit on a petition filed by Mr Vaiko and others. They had complained to the court that the unit was discharging noxious effluent which devastated the entire environment by polluting sea, land and air in the region.

The plant has been closed following the order issued by Tamil Nadu Pollution Control Board in reply to the complaint by the town’s residents that the sulphur dioxide emitted by the company was much higher than the permissible levels. Since 23 March this year, people in and around Thoothukudi have been complaining of suffocation, sneezing and burning sensation in the eyes due to large scale discharge of sulphur dioxide.

However, a press note from the company claimed that the plant adhered to the highest standards of environment, health and safety practices.

The factory, which began production in 1996 has an installed capacity to produce 4,00,000 tonnes of copper per year. It has a regular workforce of 1,000 and 3,000 contract workers.

#India- Peoples Victory- STERLITE COPPER CLOSED #goodnews


Sterlite Copper Closed
30 March, 2013 — The Tamil Nadu Government has relented to public pressure and shut down Sterlite Industriescopper complex today. According to a worker, officials from 10 government departments arrived by the vanload in the plant last night at 8 p.m. The management then called a meeting of all staff and workers, and announced that the plant was shutting down. Sterlite requested time till about 12 midnight for phased closure, and this was conceded by the Government. By 1210 a.m. all plants except the smelter were shut down. Electricity connection to the copper complex has been disconnected.

On March 28, 2013, more than 5000 people from Thoothukudi — led by the Anti Sterlite People’s Struggle Committee — marched towards Sterlite to shut down the plant. Nearly 1000 people were arrested. The rally was prompted by a toxic gas leak on March 23. Sterlite has been a controversial company since the time that it was proposed in 1994. In its 20 years of operation, it has been shut down twice by the Madras High Court — once by way of an interim order, and in September 2010 through a final order. Sterlite appealed the High Court’s closure order in the Supreme Court, and the plant that was shut down last night was operating on leave from the Supreme Court.

A verdict on the Supreme Court case is expected on 2 April, 2013.

SC to decide fate of Sterlite’s Tuticorin plant Tuesday
By Indo Asian News Service | IANS India Private Limited

New Delhi, March 29 (IANS) The Supreme Court will Tuesday (April 2) pronounce its verdict on the fate of the Sterlite Industries’ copper smelting plant in Tamil Nadu‘s Tuticorin, which was ordered to halt its operations in 2010 by Madras High Court for violating environment norms.

The verdict will be pronounced by a bench of Justice A.K. Patnaik and Justice H.L. Gokhale.

Sterlite, which had described the high court order as “draconian”, had told the apex court that it was a public limited company with 2.3 lakh shareholders, 1,100 employees, 2,500 people employed indirectly and an annual turn over of Rs.13,000 crore.

It said the company was meeting 50 percent of the domestic requirements of copper and was contributing Rs.1,600 crore by way of taxes. Sterlite Industries was the largest manufacturer of copper in the country and even exported it, it added.

In the course of the hearing that was spread over several weeks, the apex court had asked the National Environmental Engineering Research Institute (NEERI), Central Pollution Control Board (CPCB) and Tamil Nadu Pollution Control Board (TNPCB) to carry out detailed inspection of the plant and its site.

CPCB counsel Vijay Panjvani said Sterlite spent Rs.150 crore for putting in place new pollution control devices to overcome the deficiencies in its pollution control measures as suggested to it by different agencies mandated to protect the environment.

The Madras High Court by its Sep 28, 2010 order had directed the immediate closure of the plant, nut the apex court, by its interim order of Oct 1, 2010, stayed its operation.

Besides the closure, the high court had also directed the payment of compensation to Sterlite’s employees as per the provisions of the Industrial Disputes Act.

Tuticorin’s district collector was also directed to take all necessary and immediate steps for the re-employment of the workers in some other companies, factories or organizations.

Challenging the high court order, Sterlite Industries contended that it was passed on a PIL filed in 1994, pointing to then alleged deficiencies in the compliance of the statutory environmental provisions.

It said that though the hearing on the PIL was concluded in January 2010, it was eight months after on Sep 28, 2010, that the high court passed the order directing the immediate shut down of the company.

While ordering the plant’s closure, the high court had noted that it was within 25 km of an ecologically fragile area

 

#India- Apex court puts a ‘God’ poser for Vedanta Group


Adivasi Women

 

 

 

R. BALAJI, Pioneer

New Delhi, Feb. 19: The Supreme Court today put some searching questions to the Vedanta group and the Odisha government, asking whether they could “banish God” and “destroy the faith of the tribals” who deem sacred a hill picked for bauxite mining.

The bench of Justices Aftab Alam, K.S. Radhakrishnan and Ranjan Gogoi asked whether “you can dig out the Nizamuddin Dargah or the dargah at Ajmer” when the Naveen Patnaik government insisted the Niyamgiri Hills was its property and contested the tribals’ belief that God existed there.

“Even if nothing is there, you can’t destroy the faith of those people. We are not talking about the entire hills but the highest point where the tribals believe their God exists. They believe he is on the hilltop. Can you tell them take away your God to another place? Are you banishing the God?” the bench asked.

The Union ministry of environment and forests had in 2010 cancelled the state’s permission for the mining on the ground that green norms and the tribals’ special rights to occupation and worship had been violated.

The judges today posed the queries after senior state counsel Aryaman Sundaram assailed the ministry’s decision and said there was no record or proof to show any temple or tangible idol that the tribals worshipped on the hilltop.

The court said it would be appropriate for the company and the state to seek the consent of the gram sabha for the mining activities as mandated under the Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006.

“Under the act, the gram sabha has to decide the issue. Its consent has to be obtained, why should we interfere? Why did you put the cart before the horse?” Justice Alam, heading the bench, asked.

Sundaram argued that while prior consent was essential, it was not “imperative”. “Consent is not imperative at all. I am the state government, it is mine. I can’t be prevented from taking up industrial activities.”

The judges then asked what would happen to the faith of the tribals for whom the hilltop was sacred. “For them it is faith. Can you dig out the Nizamuddin Dargah or the dargah at Ajmer?” the court asked.

Sundaram responded by saying the hilltop did not give tribals any right to worship and that “the hill is not sacrosanct”. The court retorted: “Yes, nothing is sacrosanct except bauxite mining!”

Solicitor-general Mohan Parasaran will tomorrow begin arguments putting forward the Centre’s position. But the ministry had earlier opposed the state’s claim that there is no habitat on the hills.

 

 

Indian Govt’s sell off plan may hit Vedanta


 , TNN | Feb 4, 2013, 05.06AM IST
NEW DELHI: In what may come as a setback for Vedanta Group, the government is considering offloading its stake in Balco and Hindustan Zinc (HZL) in the stock market instead of selling the shares to metals tycoon Anil Agarwal. The discussion comes at a time when the Centre is keen to sell shares in companies such as HZL and Balco, where the government disinvested its stake during the NDA regime, and monetize value from other assets in a bid to raise resources to bridge the widening fiscal gap.

Sources privy to the discussions said that talks have been held at the highest level in the government and one view was that sale of shares in the market will not only help the government realize better value but also avoid controversy, especially related to pricing.

In 2001, the government had sold a 51% stake in Balco to Sterlite Industries, leaving it with 49% holding. It holds a tad less than 30% in Hindustan Zinc, while Sterlite has close to 65% stake.

The share sale has been held up for several years as UPA-1 cited provisions of the Companies Act to deny the share sale.

In both cases, the shareholders’ agreement provided for the acquirer to exercise a call option or gave Agarwal’s outfits the right to buy the shares after a specified period. But UPA-1 decided against selling shares in every company where call options were provided for but has now woken up to selling residual stake as it faces an acute cash crunch.

Coupled with its inability to cut down on wasteful expenditure, it has already missed the fiscal deficit target of 5.1% of GDP and stares at the prospect of a sovereign ratings downgrade, which will put Indian securities in junk grade and hamper investment into the country.

As a result, it is pursuing an aggressive disinvestment programme with a target to mop up Rs 30,000 crore by selling stakes in several public sector companies such as NMDCOil India andNTPC through the public offer and auction route.

Sources said an offer for sale or auction of HZL shares was one of the options that was being pursued.

 

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