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Following is an excerpt from http://www.hemscott.com/news/latest-news/item.do?newsId=53878217759003. 

… India’s Supreme Court set new conditions for the project.

Vedanta’s battle to mine bauxite to feed the refinery in forests considered sacred by indigenous people has been seen as a test case in India, pitting industrial development against the interests of local inhabitants and the environment.

The Supreme Court refused to let the project in the eastern state of Orissa go ahead in its present form on the grounds that it could affect ‘sustainable development’ and asked Vedanta to come back with a new plan.

The court said Vedanta would have to give money for forest destruction, wildlife management and tribal development totalling around 180 mln usd.

Other conditions would include handing over 5 pct of pretax profits annually from its mining projects across India to the Orissa government.

Vedanta would also have to set up a ‘special purpose vehicle’ to ensure that environmental regulations were met, the court said.

Vedanta must file an interim application within eight weeks saying if it agreed to the conditions and the Supreme Court would reconsider the project, the court bench ruled.

Vedanta has been fighting for three years to obtain clearance for open cast mining of vast deposits of bauxite in the densely forested Niyamgiri hills to feed the 900 mln usd alumina refinery it has built nearby.

There was no immediate comment from Vedanta on the court ruling but it has in the past denied any wrongdoing and argued its projects would be welcomed by residents of the desperately poor region.

Following is an excerpt from Pioneer that gives the first reaction from Vedanta officials in Orissa on the supreme court judgment.

Reacting to the judgment, vice-president of Vedanta Alumina Ltd AK Samal said the Supreme Court had reiterated its emphasis on sustainable development but has no objections in principle to mining at Niyamgiri. However, the court has stipulated certain conditions to be complied by the project proponent.

He said the apex court had desired that Sterlite Industries, the flagship company of Vedanta Resources PLC in India, duly enlisted on the Indian Stock Market be a part of the Special Project Vehicle (SPV) for mining at Niyamgiri and Scheduled area development at Lajigarh, where the company’s alumina refinery is located. "We will take all steps to immediately abide by the directions and conditions set out by the SC," he said, adding that the company was still waiting for a copy of the judgment.

Samal said his company was committed to the cause of the social uplift through reasonable industrialisation.

…. Secretary of the Orissa Wildlife Society Biswajit Mohanty, who had filed the petition against the Centre’s decision to allow Vedanta to set up its aluminum refinery and undertake mining activities, said the SC had taken note of their concern. On behalf of the Lok Abhiyan, noted activist Prafulla Samantray had also filed a petition before the Central Empowered Committee (CEC) of the SC.

The social activists filed the petition alleging that if Vedanta was allowed to undertake mining activities, the whole biosphere of Niyamgiri would be affected. The two major rivers, Bansadhara and Nagabali, which originate from the hill, would disappear. Thus it would affect the whole tribal population of the southern parts of the State, they argued.

Taking note of the serious allegation, the CEC had sent a two-member expert team (SK Chadda and SC Shrama) to make a spot inquiry. The team visited Niyamgiri in December 2004. It submitted its report in January 2005. Later, the CEC started the hearing of the petitions. The CEC visited Lanjigarh, where the plant is coming up. It submitted its report to the SC in September 2005, reportedly suggesting that Vedanta should not be allowed to take up mining activities.

The Ministry of Environment and Forests (MoEF) granted environmental clearance for the project on September 22, 2004, and in its letter clearly specified that the source of bauxite for the refinery would be the Niyamgiri mine near Lanjigarh. This led to a furore among environmentalists, who argued that as it came under the Schedule V area of the Constitution, the environment clearance granted by MoEF and forest clearance should be reviewed.