Vedanta, Defying `Avatar' Protest, Seeks to Mine Orissa Bauxite This Year

Vedanta Resources Plc, battling criticism from environmental groups and some shareholders over plans to extract bauxite in India’s Niyamgiri mountains, said it may begin mining at the site as early as the end of the year.

“All is going well,” Vedanta Chief Executive Officer Mahendra Singh Mehta said in an interview in London. “It shouldn’t take more than three weeks for the government to decide” on approvals after it receives an environment ministry report scheduled for this month.

The mine, key to Vedanta’s plans to meet its targets to expand refining, has been delayed for more than four years as human rights and environmental groups raised concerns about pollution and the effects on the local tribal community. Vedanta on Feb. 9 said it “strongly” denied Amnesty International’s allegations that residents in the region have been displaced.

Some shareholders also protested against the company’s handling of the affair, with 12.8 percent voting against the remuneration report at the July 28 annual general meeting. Aviva Investors, the fund unit of the U.K.’s second-largest insurer, said it would vote against three resolutions.

Environmental and human-rights protesters gathered outside the meeting, some shouting, “Vedanta, Vedanta out” and others painted blue, like characters from the movie “Avatar” about an alien tribe’s battle to save its planet from a corporation determined to strip its raw materials.

Dutch pension fund PGGM said on July 7 it sold 13 million euros ($17 million) of Vedanta stock and the Church of England offloaded its shares in February.

‘No Habitation’

“Certain NGOs complain that the consultation isn’t complete and human rights issues are raised,” Mehta said. “The fact is that the project has undergone a very vigorous consultation process. We are very positive; it’s taking longer time, no problem. We are in the final approval stage.”

India formed a panel to investigate the potential effect of mining on tribes and wildlife in Orissa, reviewing earlier reports on use of forest land, the Ministry of Environment and Forests said June 30. It would offer findings within 30 days.

“There is no habitation on and near the proposed mining area,” Mehta said. “They are reviewing it once again so nothing is left out.” The hills around the site are about 1,400 meters (4,600 feet) high and nobody lives in the area because there aren’t any bodies of water or vegetation, he said.

Vedanta plans to transfer bauxite from the mine to its alumina refinery, about 5 kilometers (3 miles) from the hills, through a pipeline, Mehta said in an interview on July 28. Aluminum is made from alumina refined from bauxite.

‘Environment-Friendly’

“Laying a conveyor from the mine to the refinery will take about 3-6 months,” Mehta said. “Normally the bauxite transportation is done by trucks, which creates pollution; this is a very environment-friendly way.”

Bauxite in the hills, totaling about 80 million metric tons, is 1 or 2 meters from the surface and the “best in its class in the world,” he said. “You just scrape the surface, no blasting is needed. It could be converted to alumina at a cost far lesser than any of the bauxites in the world.”

Vedanta today reported record first-quarter earnings before income, tax, depreciation and amortization, which more than doubled to $793.9 million from $354.7 million a year earlier.

To contact the reporters on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net;

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