A security guard stands in front of the main gate of Sterlite Industries Ltd's copper plant in Tuticorin. (File photo: Reuters)

The Tamil Nadu government on Monday ordered the permanent shutdown of a copper smelting plant in Tuticorin, after 13 people were killed in police firing during protests against its planned expansion.

Vedanta, the London-based firm which owns the Sterlite unit, said the government's order was "an unfortunate development", and said it would study it before deciding what to do next.

The economic fallout of the shutdown could be far-reaching. To start with, what happens to the tens of thousands of people who were directly or indirectly employed due to the plant's activity? Plus, there's the question of metal supply. A commodity analyst told Business Today on Monday that a copper shortage could temporarily drive up prices, leading to more imports (at an estimated annual Forex cost of US$ 3,000,000,000) -- given India's modest share of global copper production.

At the same time, sources say, Sterlite Copper may not have to keep its unit shut for long. They cite the following trio of reasons.

First, the Tamil Nadu government "hasn't followed due legal procedure" to close down the smelter (this will be challenged), and used "arbitrary" methodology. Second, there was no show-cause notice. Third, Sterlite wasn't given time to shut down the unit.

"The GO [Government Order] merely endorsed the closure order of TNPCB [the state pollution control board]. That order was also issued on May 23 in haste," D Ravikumar, a member of the Vidudhalai Chiruthaigal Katchi, says.

"Both the TNPCB and the GO didn't give any valid reasons for the closure. This GO can be easily stayed by the court."

Ravikumar suspects that the order is a "a ploy" to "divert the attention of the protesters" and help Sterlite get a stay.

A poster displayed at a New Trade Union initiative protest in Delhi (Photo: Getty Images)

JALLUKATTU VS STERLITE | Why did things go wrong in Tuticorin?

Meanwhile, M Ponnuswami, the president of the Confederation of Indian Industry's Tamil Nadu chapter, points to planned state investments in infrastructure.

"The government has a big plan to invest in infrastructure, and [will] likely start the work by next year [in] the east coast corridor from Madurai to Tuticorin," he says. "The Sterlite issue should settle down quickly, taking the local community and other stakeholders into confidence."

WHAT THE EMPLOYEES THINK

Tuticorin locals say the smelter pollutes groundwater - indeed, that's why there's an anti-Sterlite movement in the first place.

Now that the plant has been ordered shut, what do the employees make of it?

India Today spoke to two Sterlite workers - both of whom wished to remain anonymous.

The first, a man who's worked at Vedanta for over 13 years (and at the Tuticorin plant for nearly nine), says he's been getting annual health check-ups, and hasn't had any ailments. All the information the villagers have been given, he says, is false.

"The factory is being targeted by rivals and competitors. We have been successful in the world market, and people have been misguided and misled," he claims. "We have been keeping the doors of Sterlite open for anyone to come and visit us every Saturday, and people can go around anywhere and ask any doubts. We were always open."

"The closure will be really bad - it will affect 2,000 regular employees, and 2,000 contract workers, and several others."

The second employee, a woman who has worked as a supervisor at the smelter for 10 years, says she's saddened by the protests.

"The factory has always followed all the rules and regulations," she claims.

"This is all a misunderstanding."

WATCH | India Today accesses exclusive footage of Tuticorin violence