Mumbai: The Supreme Court today cleared the diversion of  forest land for Sterlite's bauxite mining project and land acquisition for Korean steel giant Posco's 12-million tonne steel plant in mineral-rich Orissa even as opponents of the projects vowed to continue their agitation.

The SC order allows Sterlite, owned by of UK-based Vedanta Resources Inc, to mine bauxite in the Niyamgiri Hill in Kalahandi district to feed an alumina refinery it already built nearby.

Sterlite's Vedanta Alumina, part of the Vedanta Resources Group, is building an $800 million alumina refinery in Kalahandi and an aluminium smelter project costing Rs7,000 crore in Jharsuguda district.

The court also approved the diversion of 3,097 acres of forest land for the Rs50,000 crore ($12 billion) Posco steel plant in Jagatsinghpur district. It also allowed Posco to buy iron ore from the market for its factory, in addition to procuring the material from Orissa Mining Corporation.

The court has, however, separated the issues of setting up of the plant and procurement, said Janakalyan Das, the Orissa government's counsel.

In its order, the bench headed by Chief Justice KG Balakrishnan said Sterlite Industries (India) Ltd had met the Supreme Court's terms for a bauxite mining project.

The SC had earlier denied Vedanta permission to mine in the state after the company's proposal was challenged by environmentalists. A bench, headed by Justice Balakrishnan had set Vedanta conditions for mining in the ecologically fragile Niyamgiri hills in Kalahandi, including partnering with a state agency for a permit.

Vedanta then formed the Lanjigarh Scheduled Area Development Foundation with the Orissa government, Orissa Mining Corporation and a unit of Sterlite Industries as stakeholders. The company petitioned the court to allow Orissa Mining's proposal to mine in the hills.

The company also agreed through its unit to give 5 per cent of the annual profit before tax and interest from the project, or Rs10 crore, whichever is higher, to the Lanjigarh Foundation every year, with effect from 1 April, 2007.

It will also pay Rs55 crore for replanting trees in the forest and conservation area, Rs50.5 crore toward wildlife management and Rs12.2 crore for developing the indigenous people of the area.

Villagers and tribals opposing Sterlite's mining project said they are determined to continue their protests, despite the Supreme Court ruling.

Posco, the world's fourth largest steel maker, signed a memorandum of understanding with the Orissa government in June 2005 to build the plant near Paradeep port by 2016.

The project, however, made little progress with activists launching agitations and villagers uniting against the project which, they say, will displace over 20,000 people from around 15 villages and ruin their betel-leaf farming. They also vowed to continue their agitation against the project.