Vedanta shares tumble after protesters killed

Shares in Vedanta Resources slumped on Wednesday after police fired into a crowd of local residents protesting against the expansion of its Indian copper smelter.

The London-listed company, which is controlled by billionaire metals tycoon Anil Agarwal and has interests from oil to aluminium, fell 11.5 per cent to 746.8p as investors reacted to the news.

At least 11 people were killed, and scores injured, on Tuesday when Indian police in the southern state of Tamil Nadu shot into the crowd of protesters, objecting to the planned expansion of the Tuticorin smelter and demanding its permanent closure. The unrest continued on Wednesday, when another three people were shot and at least one killed.

Amid outrage over the bloodshed, the Madras High Court on Wednesday indefinitely halted work on the expansion of the copper smelter. The state government has appointed a retired judge to investigate the events, including the protests and what led to the police firing.

Speaking after the release of annual results in London and 12 hours after the shootings in India, Mr Agarwal said it was “really sad to hear about this incident”.

“It is very unfortunate,” he said. “For us, the community and our people are very important. We have done everything possible to ensure the safety of our people and protect the plant.”

Asked if he would help the families of the victims, Mr Agarwal noted the government had “certain policies”. “It is very unfortunate,” he repeated.

The Tuticorin smelter had been repeatedly accused of polluting the local groundwater, air and soil — and emitting noxious fumes — since it started its operations nearly two decades ago.

In 2010, the Madras High Court ordered its immediate shutdown, saying the plant violated environmental laws in a sensitive coastal area. The Supreme Court permitted it to reopen but in 2013, the company was fined Rs1bn for operating without the requisite permits from pollution control authorities. It has continued to have run-ins with the local pollution control authorities ever since.

The current protests started more than three months ago, intended to try to stop expansion of the controversial project. The demonstrations had been largely peaceful, but on Tuesday they turned violent, as the demonstrators marched to local government offices.

Authorities say protesters set fire to cars and threw stones, but the police firing into the crowd caused a national outcry. Adding to the public anger, Indian news channels released a tape in which a policeman was purportedly heard saying “at least one should die”.

The last time the industry suffered a tragedy on a similar scale was in 2012 when South African police fatally shot 34 striking workers outside a mine owned by Lonmin.

The violence is likely to complicate Vedanta’s expansion plan, as the project has now drawn the attention of all India’s political parties and galvanised the public. Politicians from across Tamil Nadu flocked to Tuticorin on Wednesday to express their sympathy for the demonstrators, and are planning future protests.

Mr Agarwal attempted to play down the significance of the court ruling, saying that the expansion plan was a “very small project” and worth less than 1 per cent of the company.

He also defended the company’s environmental record. “In India there is not a single award we have not won in terms of environment, safety and in terms of our practice,” he said. “The smelter has been rated the best in the world,” he added.

Mr Agrawal was speaking after Vedanta announced a 27 per cent increase in earnings before interest, tax, depreciation and amortisation to $4.1bn in the year to March.

During his interview, Mr Agarwal said the appointment of Srinivasan Venkatakrishnan, the head of AngloGold Ashanti, as its new chief executive would allow him to step back from the day-to-day running of the business and devote more time to his charitable interests.

“As Venkat comes in I am looking forward to him taking over from me and giving me space so I can do what I need to do,” he said.