NEW DELHI: Environment clearance was denied by the government on Tuesday for Vedanta’s US$ 1.7 billion bauxite mining project in Orissa on grounds of serious violation of forest laws in a blow to the UK-based group already facing legal troubles to a planned oil deal in the country.
“There has been a very serious violation of Environment Protection Act, Forest Conservation and Rights Acts by the Orissa Government and Vedanta’s bauxite mining in the Niyamgiri Hills,” Environment Minister Mr Jairam Ramesh told reporters here.
Therefore the stage II forest clearance for the State-owned Orissa Mining Corporation (OMC) and Sterlite Bauxite mining project on the Niyamgiri Hills in Lanjigarh, Kalahandi and Rayagadha districts of the state cannot be granted, he said.
“It stands rejected,” Mr Ramesh said while accepting the recommendation of Forest Advisory Committee (FAC) seeking withdrawal of forest and environment clearance respectively to the state government as well the Vedanta mining project.
Reacting to the development, Vedanta Resources indicated it was not going to abandon
its proposal. Vedanta said it has not violated any law and would look for alternate sources of the mineral.
“Vedanta Resources Plc reconfirms that there has been no regulatory violations of any kind at the Lanjigarh Alumina refinery. We are not in possession of Niyamgiri mines and no mining activity will be undertaken till all approvals are in place,” the company said in a statement here.
The company also said that the Orissa government is “actively considering” to allocate alternate bauxite mines to feed its one million capacity alumina Lanjigarh refinery where capacity augmentation is planned at an investment of US$ 1.7 billion.
The stalling of the project has come at a time when Vedanta is facing legal trouble in its bid for control of Cairn India, a potential deal valued at US$ 9.6 billion that will push its stake in the oil market. The decision also caused some consternation in the BJD-ruled government in Orissa calling it unfortunate. Chief Minister, Mr Naveen Patnaik hoped there is “no politics” behind Environment Ministry rejecting clearance while Mr Ramesh dispelled any such impression.