Setback for Vedanta: SC says Gram Sabha to decide on mining in Niyamgiri

Vedanta will be allowed to mine in the Niyamgiri Hills in Kalahandi district of Odisha only if the Gram Sabha allows, the Supreme Court said today.

The Gram Sabhas of Rayagada and Kalahandi districts of Odisha will decide in three months on issues arising out of bauxite mining project in Niyamgiri Hills, said the apex court.

The final decision will be taken by the Environment Ministry on the report of the Gram Sabhas in the next two months, the apex court said.

In 2008, the Supreme Court gave the clearance for phase-II ofVedanta’s mining project at Niyamgiri. However, in August 2010,the Ministry of Environment and Forests withdrew the clearance after the expert panel headed by NC Saxena said in its report that the mining will have severe adverse impact on the ecology and the aboriginal Dongria Kondh tribals.

Congress vice-president Rahul Gandhi had also held rally in Kalahandi supporting the tribal cause and termed the ministry’s cancellation of the clearance as a “victory”.

The report by Saxena panel highlighted various potential environmental threats and the endangering of the Niyamgiri’s Dongria Kondh tribe. It also withdrew the earlier permission given to Vedanta for expansion of its 1 MT capacity alumina refinery to 6 MT at Lanjigarh block of Kalahandi.

Vedanta and the Odisha Mining Co-operation, who are the original lessee of the mines, had then moved the Supreme Court challenging the cancellation.

Vedanta shut down its Lanjigarh Alumina Refinery on 5 December, citing shortage of bauxite. As per the memorandum of understanding with Vedanta, Odisha Mining Corporation was supposed to supply up to 150 million tonne of bauxite for Lanjigarh Refinery from Niyamgiri. During the last five years of curtailed operation, the company claimed it had lost about Rs 2,500 crore on an investment of Rs 5,000 crore in the Lanjigarh plant.