Vedanta shares rise after state allows oxygen production from closed smelter
Shares of oil-to-metals conglomerate Vedanta Ltd rose around 5% on Monday after India's Tamil Nadu state government allowed its shuttered copper smelter to produce oxygen for four months amid a nationwide shortage as coronavirus cases soar.
"It was decided in an all party meeting that Vedanta be allowed to operate the oxygen plant for a temporary period of four months," the Tamil Nadu government said in a statement, adding that production of copper would not be permitted.
Vedanta's stock rose by as much as 5.1% before paring gains to stand 3.6% higher at 236.10 at 0935 GMT, on track for the best session in nine weeks.
Environmentalists and local activists raised concerns that the move could provide a "backdoor entry" for Vedanta. The state ordered the 400,000 tonne per annum Sterlite copper smelter to close in May 2018, a week after police killed 13 protesters seeking the plant's closure for alleged pollution.
"Under any circumstances, the polluting Sterlite Copper plant will not be allowed to open," M.K. Stalin, the main opposition leader in the state said in a tweet.
Vedanta did not immediately respond to a request seeking comment. The company has consistently denied allegations of pollution, and has appealed to the country's Supreme Court, seeking to reopen the plant.
Vedanta, controlled by billionaire Anil Agarwal, said last month it was looking for a Indian state government partner to set up a 100 billion rupees ($1.37 billion) copper smelter.
India's new coronavirus infections hit a record peak for a fifth day on Monday, with overcrowded hospitals in Delhi and elsewhere turning away patients after running out of supplies of medical oxygen and beds.