Two US Congressmen object to Vedanta’s Asarco takeover

June 12th, 2008 - 8:20 pm ICT by IANS  

New York, June 12 (IANS) Two Congressmen have raised objections over Vedanta Resources’ purchase of the US mining company Asarco, expressing concerns about the London-based metals and mining major’s environment track record. The two Arizona members of House of Representatives, Gabrielle Giffords and Raul Grijalva, sent a letter Wednesday to US Attorney General Michael Mukasey, urging the Department of Justice to investigate Vedanta’s environmental record before allowing the deal to proceed.

Vedanta’s subsidiary, Sterlite Industries (India), bought over the operating assets of the century-old American Smelting and Refining Co (Asarco), based in Tucson, Arizona, for $2.6 billion a fortnight ago. The deal awaits approval of the US Bankruptcy Court in Texas.

In their letter released to the press, the two Congressmen have alleged that Vedanta has “established an operating record in India and Africa that does not bode well for responsible stewardship of assets in the US”.

In particular, the letter cited reports that Vedanta may have engaged in a pattern of environmental labour abuses including contaminating water supplies near mines in India and Zambia, improperly disposing of toxic waste and failing to provide protective gear to mine workers.

The Congressmen have expressed disappointment that at a hearing last week, the Department of Justice attorney argued that Vedanta’s environmental record should not be a disqualifying factor for the Asarco deal.

“Given Asarco’s existing legacy of environmental degradation, it should be a priority to ensure that its assets pass into the hands of a responsible corporate citizen,” they said.

The Congressmen have further stated that if the Department of Justice approves the Asarco settlement - as is required by law - before probing Vedanta’s environmental record, “we will ask the Arizona Department of Environmental Quality to conduct an investigation before approving any transfer or offering permits to the new owner”.

The Asarco assets to be acquired include three open-pit copper mines and a copper smelter in Arizona, and a copper refinery, a rod and cake plant and a metals plant in Texas. The asset acquisition is on a cash-free and debt-free basis.

Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations.

Asarco last year produced 235,000 tonnes of refined copper. The company recorded a total revenue of around $1.9 billion in the year ended Dec 31, 2007.

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