Government examining penal action against Vedanta

Orissa Chief Minister Naveen Patnaik's plea fell on the deaf ears of the central government even after PM Manmohan Singh's assurance that matters regarding Vedanta and POSCO would be expedited. 

Environment minister Jairam Ramesh has rejected the Stage II forest land approval for Vedanta's bauxite mining project in Niyamgiri Hills (Orissa) saying that the project clearance is 'inoperable'.

Going by the NC Saxena report, the centre has decided to go strict with Vedanta. Ramesh disclosed that the government is examining penal action against Vedanta and is also mulling issuing a show cause notice to the company for illegal mining.

Earlier, four member panel headed by N C Saxena, a National Advisory Council member said that UK-based mining group Vedanta should not be given permission for bauxite mining in Orissa. According to the panel, bauxite mining by Vedanta in Orissa violates the Forest Conservation Act and deprieves two primitive tribal groups of their rights.

The move comes as a big blow for Vedanta as its subsidiary Vedanta Aluminum had applied for the Niyamgiri bauxite mines to feed its alumina refinery. Sterlite owns 29 per cent of Vedanta Aluminum and the rest is held by Vedanta.

Vedanta has 1.4mtpa alumina refinery in Lanjigarh (fully commissioned). The company recently got approval to expand its refinery capacity from 1mt to 6mtpa.