Another Big Blow to India-focused Vedanta Resources

Article first published as Another Big Blow to India-Focused Vedanta Resources on Technorati.

Vedanta-Resources Here is another big blow from India’s environment ministry to India-focused mining giant Vedanta Resources. The U.K. based company has received a letter that is also posted on environment ministry’s website (that can be found here and here) in which it has been asked to explain for its serious violations of country’s green laws made at Bauxite refinery in Orissa. The ministry asked Vedanta to explain why the environment clearance given to its one million tonnes a year factory in Orissa should not be cancelled. The government of India has recently rejected permission to mine at Niyamgiri hills in Orissa. A government panel has given a report to the government not to permit Vedanta to mine in forest area that would seriously endanger the existence of two tribal groups namely Dongria Kondh and Kutia gondh.

Vedanta is also facing hurdles in its bid to acquire Cairn India for $9.6 billion. ONGC has 30% stake in Cairn India’s Rajasthan oil field due to which Cairn India is subjected to get permission from the federal government in case of change of ownership.

The latest government notice puts Vedanta’s alumina refinery under cloud. The company has plans to expand the refinery’s annual capacity to six million tonnes. Vedanta’s project in Orissa is valued at about $9.5 billion. It is also come to known that the company has not taken permission to increase the capacity of the bauxite refinery. The latest violations were found by an environment ministry inspection team which said, among other breaches, the Vedanta

refinery was running on bauxite sourced from mines that did not have green clearance. "It may be noted that if no response is received within 15 days, appropriate orders as deemed fit will be passed," the ministry’s letter said. It even counted closure of the refinery as one of the possible steps if a satisfactory explanation was not given.

Vedanta is among several big companies, including South Korea’s steel giant POSCO, whose Indian projects face a long delay of 6 years as a proactive environment minister Jairam Ramesh tightens rules that brings him in conflict with other government ministers who are pushing for rapid industrialisation at any cost under the leadership of growth-focused Prime Minister Manmohan Singh. However, the company had denied last week there were any regulatory violations of any kind at its refinery in Orissa’s Lanjigarh area.

Niyamgiri hills area is actually a sacred place for Dongria and Kutial tribes. They have expressed their opposition to the refinery and mining for years through several agitations. But the Orissa government didn’t heed their demands and proceeded with the Bauxite refinery misinforming the Central environmental ministry.

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