Dec. 23 (Bloomberg) -- Four non-government welfare organizations have filed a petition against Vedanta Resources Plc's building of a $1.9 billion alumina plant in India's Orissa state on grounds it is harming the environment.

A two-member committee set up by the government is scheduled to submit its report to the country's apex court by Jan. 10, Vinod Kumar, chief secretary of department of forests said in a telephone interview from the eastern state's capital Bhubaneshwar.

Any delay in building the plant will disrupt the company's expansion plans as it intends to use the alumina, a raw material for aluminium, at Bharat Aluminium Co. Vedanta acquired Bharat Aluminium in 2001 and is expanding its aluminum capacity to 345,000 tons from 100,000 tons.

``The expansion plan will be unviable if the company does not have access to alumina as buying alumina from the market will raise costs and the company may also face supply constraints as demand for the metal exceeds supply,'' said Shridhar Iyer, analyst at Batlivala & Karani Securities in Mumbai said.

Demand for aluminum, used in cars, buildings and beverage cans, is rising in India with its economy expected to grow by 6.5 percent this year.

Vedanta began construction of the 1.4 million ton alumina plant in October and is awaiting environmental clearance from the central government to begin work at the bauxite mines allotted by the state.

Vedanta expects to get all the clearances in the next six months, Sandeep Gokhale, director of Business development said last month. Bauxite is the principal ore of aluminum.

Environment

Non-government organizations said the company felled trees for construction of the alumina plant.

``The company is flouting forest laws,'' Biswajit Mohanty, an official of the Orissa Wild Life Society, said in a telephone interview from Orissa. ``The alumina plant will pollute the environment once it starts production,''

Vedanta's Gokhale wasn't immediately available to respond to Mohanty's comments.

The alumina plant will be competing with rivals such as the world's second-largest aluminum producer, Alcan Inc. and Hindalco Industries Ltd., India's biggest non-ferrous metals producer, who are jointly setting up a $1.1 billion alumina refinery in Orissa.

The joint venture, first proposed 12 years ago, was delayed mainly due to opposition by tribal communities, who would be made homeless by the plant.

To contact the reporters on this story: Debarati Roy in Mumbai droy5@bloomberg.net

Last Updated: December 23, 2004 07:20 EST