Vedanta says it broke no law, looks for alternate bauxite site

NEW DELHI: Halted by the government from mining bauxite in Niyamgiri in Orissa for the $1.7 billion aluminium project, Vedanata Resources on Tuesday 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 1 million capacity alumina Lanjigarh refinery where capacity augmentation is planned at an investment of $1.7 billion.

In a setback to Vedanta, the government on Tuesday rejected clearance for mining bauxite in Niyamgiri hills on environment grounds and said a show-cause notice is being issued to the group asking it to explain why the clearance for Lanjigarh refinery should not be cancelled in view of gross violation of environment norms.

"It (stage II clearance for Vedanta's bauxite mining proposal in Niyamgiri) stands rejected," Environment Minister Jairam Ramesh while accepting the recommendation of Forest Advisory Committee.

"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," he also told reporters.

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, Ramesh added.

The company said it has already invested $5.4 billion in its aluminium projects in Orissa and "remains committed to working with the local communities to ensure sustainable development in this region."

"As at 31 March 2010, Vedanta had invested $5.4 billion in its Aluminium projects in Orissa. Around 10,000 people are employed at the Lanjigarh alumina refinery plant. Vedanta is currently operating its Alumina refinery with outsourced bauxite," it said.

It said state government had signed a pact with the company in 2004 for setting up an integrated alumina and aluminium complex along with the associated captive power plant in the state of Orissa.

This MoU also included supplying 150 million tonnes of bauxite for the Vedanta's alumina refinery at Lanjigarh, the company said adding, towards this the Government of Orissa identified Niyamgiri mine as the initial source of bauxite supply to the extent of 78 million tonnes," it said.