Indian mine plan hits legal snag

November 25, 2007 - 0:0

Vedanta Resources, the mining company, has suffered a setback in its attempt to develop a bauxite mine in sacred hills in the Indian state of Orissa after the country's Supreme Court barred the project from going ahead.

But it added that the London-listed company could re-submit a proposal to mine the area if it met certain stipulations.
The London-listed company plans to dig the mine in the Niyamgiri hills of Orissa to supplement the alumina refinery it has already built in the area, as part of an $800m project.
But activists say local communities will be displaced as a result of the plan, which will destroy their livelihood and the ecology of the area.
As part of its stipulations, the court has asked the FTSE 100 company's Indian subsidiary Sterlite Industries to set up a special purpose vehicle (SPV) with the local Orissa Mining Corporation for the project, to ensure the income generated stays in the country.
It has asked for this SPV to pay out 550m rupees (£6.7m) to compensate for the forest that will be destroyed and 500m rupees to pay for a wildlife management plan. It says a further 100m rupees, or if higher 5% of its annual pre-tax profit from mining projects all over the country, should go to the Orissa government every year.
The company said it was unable to respond as it had not yet received the judgment, but added: ""We are committed to the cause of bringing social upliftment through responsible industrialization and creating employment opportunities in the state of Orissa.""
ActionAid India's director, Babu Matthew, welcomed the decision, but said the charity was apprehensive about the proposed compensation levels and would seek a court order for a more scientific cost-benefit analysis. He said: ""Any mining in Niyamgiri will create two kinds of catastrophe.
(Source: Guardian)