Government may halt Vedanta's alumina plant expansion

Vedanta Resources' growth plans in India is likely to get another jolt with the government seriously considering a halt to the expansion of its alumina refinery in Orissa, citing serious violation of environmental laws.

The move, which comes two months after the government rejected the UK-based group's bauxite mining plans in the state, will affect Vedanta's plan to expand the Lanjigarh unit's capacity from one million tonnes to six million tonnes a year.

The ministry of environment and forests had, in August, asked the company to explain why green clearance given to its refinery should not be revoked after a probe found it violating laws, including sourcing bauxite from mines that did not have green clearance.

The company, however, denied regulatory violations of any kind at its Lanjigarhv refinery.

Environment minister Jairam Ramesh is expected to take a final decision on Vedanta this week.

Reports quoting environment ministry officials said while Vedanta's expansion plans are serious and unambiguous violation of environment laws, the refinery is also in violation of procedures.

While Vedanta made no comments on the issue, it is also not clear if the environment ministry will allow expansion of the refinery for a revised expansion plan.

Environmental concerns are holding up major projects in the  country, in clung South Korea's POSCO proposed 12 million tonne steel project in Orissa.