Vedanta says looking for alternative mines after setback

25th August 2010, Comments 0 comments

Vedanta Resources said Wednesday it would seek other sources of bauxite in India after its plans for a mine in an area held sacred by tribespeople were blocked by the government.

Vedanta, owned by Indian billionaire Anil Agarwal, had wanted to start an open-cast mine in the Niyamgiri Hills in Orissa state to feed a nearby aluminium refinery, but the project was struck down Tuesday by the environment ministry.

Environment Minister Jairam Ramesh accused Vedanta of violating environmental rules and showing "blatant disregard" for thousands of Dongria and Kutia Kondh tribespeople who believe the hills are sacred.

"There is no dearth of bauxite in the state," Vedanta India spokesman Pavan Kaushik told AFP. "Niyamgiri was the preferred source because of its location (next to the refinery). Now we will have to get it from somewhere else."

He said that Vedanta was still committed to the one-million-tonne refinery, which is currently running on bauxite from neighbouring states.

Vedanta, which says it has already invested 5.4 billion dollars developing aluminium facilities in Orissa, has strongly rejected allegations of wrongdoing.

It will be up to state-owned Orissa Mining Corp., which holds the mining lease for Niyamgiri Hills area, to mount any legal challenge to the move to block the mine project, he said.

The Orissa government is scouting for other sources of bauxite nearby, Kaushik said.

The environment minister in a stinging statement on Tuesday threatened to scrap approval for the refinery, saying it had violated environmental regulations by building on forest land without permission.

Ramesh also accused Vedanta of starting a six-fold expansion of the aluminium project without approval, showing "the contempt with which this company treats the laws of the land".

Vedanta insists the complex will help alleviate poverty in the deeply deprived region, and that the company is committed to providing jobs, health care, education and school feeding schemes.

"We will continue with our commitment to the people in the area" despite the ruling, Kaushik said.

The company faces other problems in India over a proposed acquisition worth up to 9.6 billion dollars of 51-60 percent of Cairn India, whose biggest asset is the oil-rich Mangala field in Rajasthan state.

© 2010 AFP

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