MAC: Mines and Communities

U.S. judge orders Vedanta to pay $82.75m in damages

Published by MAC on 2012-02-20
Source: Reuters (2012-02-15)

Vedanta Resources has been dealt a "comeuppance" - yet again.

This time, however, it has little to do with the UK company's unparalleled disrespect for communities, workers or the environment.

Having failed to pay an agreed sum for bankrupted Asarco in 2008, Vedanta's been found guilty of breach of contract, and ordered to pay the US copper company more than US$ 82 million in damages.

Historically, Asarco was one of the worst polluting of all US mining companies.

Its new owner, Grupo Mexico, is also one of the most criticised of  Latin American corporations.

As for Vedanta - few people will shed a single tear over its latest predicament. However shareholders - notably majority stakeholder Anil Agarwal -  may have a sleepless hour or two.

Previous articles on MAC: Asarco bidding battle enters final strait

See also Settling mining damages, the US way

U.S. judge orders Sterlite to pay Asarco $82.75m in damages

Reuters

15 February 2012

MEXICO CITY - A U.S. judge has ruled copper miner Asarco is entitled to $82.75 million in damages after Indian resources company Sterlite Industries * backed out of a deal to pull the U.S. firm out of bankruptcy in 2008.

The ruling, dated Feb. 13, was issued by judge Richard S. Schmidt, from the U.S. bankruptcy court for the southern district of Texas at Corpus Christi.

Asarco exited bankruptcy in December 2009 under the control of Mexican miner Grupo Mexico. In 2010, it filed suit against Sterlite for breach of contract.

Sterlite, based in Mumbai, had bid $2.6 billion for Asarco in May 2008 and was chosen by the U.S. copper miner's management to sponsor Asarco's bankruptcy exit in what could have become one of the largest Indian cross-border deals.

But Sterlite withdrew its offer in October 2008, saying it needed a substantial reduction in price after copper markets collapsed.

Last year Grupo Mexico, which also operates railroads in Mexico, called off plans to merge its two mining units amid better-than-expected results at its Asarco subsidiary .

Grupo Mexico had proposed in 2010 to fuse Asarco with Peru's Southern Copper.

* Editorial note: Sterlite Industries India Ltd majority-owned and controlled by Vedanta Resources plf.

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