Vedanta Resources Plc said on Friday it would not mine bauxite at the controversial Niyamgiri hills project in Odisha until it can win over local communities opposed to its plan.
The environment ministry had rejected Vedanta's request to mine in the Niyamgiri hills following persistent protests from local communities that consider the region sacred.
''In deference to the sentiments of the community, Vedanta confirms it is not seeking to source bauxite from the Niyamgiri bauxite deposit for its alumina refinery operations and will not do so until we have the consent of the local communities,'' Vedanta said in a statement today.
The billionaire NRI Anil Agarwal-led Vedanta Resources, however, stopped short of saying it had abandoned the project.
Vedanta will now have to look elsewhere for the raw material to feed its Rs5,000-crore Lanjigarh alumina refinery in the state until it gets approval from the local community.
Vedanta said it was working with the Odisha government to find alternative sources of bauxite. An agreement with the state government guarantees the miner 150 million tonnes of bauxite, according to the Vedanta statement.
The company's proposal to mine bauxite in the Niyamgiri hills has angered rights groups globally after the locals, mostly belonging to the Dongria Kondh and Kutia tribes, said the region is home to their deity Niyam Raja.
Analysts see Vedanta's announcement as part of the plans by Tom Albanese, its new chief executive, to make the London-listed company a more attractive proposition to international investors.
The ministry of environment and forest had in December turned down Vedanta's mining proposal, after all the 12 gram sabhas held in July-August last year unanimously expressed opposition to the mining operation in the hills saying it would violate their social, cultural and religious rights.