Indian court orders study on impact of mine project

British giant Vedanta Resources faces fresh delays in its battle to mine an Indian forest considered sacred by tribals after the nation's top court ordered a sweeping impact study.

Vedanta Resources PLC's legal fight to mine the area is being seen in India as a test case, pitting industrial development interests against those of indigenous peoples and the environment.

Vedanta to mine vast deposits of bauxite in the thickly forested Niyamgiri Hills in mineral-rich Orissa state to feed a US$900 million alumina refinery it has built nearby.

But now the Indian Supreme Court, which has been hearing the case for more than a year, has ordered a "comprehensive" government report on the impact of large-scale mining activities in the region on tribes, wildlife and the environment.

Vedanta's "will set a precedent for all projects in mineral-rich forest areas," Justice Arijit Pasayat said last week in issuing the order.

The court wants the impact report by Oct. 5, when it next hears the case.

The court, which will need time to study the report, has the power to halt the project, force Vedanta to find another area to mine or give the project the green light, lawyers say.

The project is made up of three parts -- an alumina refinery, smelter and the mine to obtain the bauxite buried under 672 hectares of forest in the Niyamgiri Hills that are worshipped by the Dongria Kondh tribe.

"Niyamgiri is our god," Rajendra Vadaka, one of the tribals, said. "We are dependent on these mountains. If we go somewhere else we will die."

The refinery is completed. The smelter is being built while Vedanta is seeking clearance to mine in the richly biodiverse area, which has elephants, rare golden geckos and orchids.

In a stinging 2005 report, an environmental panel set up by the Supreme Court accused Vedanta of blatantly violating environmental guidelines.

The committee said Vedanta had "deliberately and consciously concealed the involvement of the forest land in the project" and it urged that environmental clearance given to the refinery be revoked.

Vedanta not respond to requests for comment but in the past has denied any wrongdoing.

The company's lawyer, K.K. Venugopal, told the court last Thursday that residents of the desperately poor region would welcome the project "with open arms" and offered training to locals.

But opponents say the tribals would not be able to adapt.

"If this mining permission is granted, the primitive group will completely vanish -- they cannot go and live in some other place and cope with another way of life," said Bratindi Jena of the international non-governmental organization ActionAid.

"They live a completely different lifestyle, they go into the woods to collect their food, they're completely dependent on the mountain for their social, religious and cultural identity," Jana said.

"Vedanta's plans proceeding would make a mockery of the special protection that `primitive tribal groups' are afforded under the Constitution," she said.