Remote tribes who believe their gods live in the bauxite-rich Niyamgiri hills of India, earning comparisons to the blue aliens of ‘Avatar,’ rejected Vedanta Resources Plc’s plans for a $7.8 billion aluminum complex.
The last of the 12 villages on the Niyamgiri tracts in the eastern Odisha state rejected the incentives offered in exchange for mining approval, said Sashi Bhusan Padhi, the revenue head of the district where the meeting was held.
The decision of the Dongaria and Kutia tribes will probably prompt the environment ministry to reject clearance, further impeding raw material access for billionaire-owner Anil Agarwal. The loss is the latest in a series of setbacks for Vedanta’s metal operations in India and may delay the start of 1.25 million metric tons of new aluminum capacity lying idle for want of bauxite.
“Vedanta doesn’t have a long-term bauxite source and that leaves the company with quite a lot of assets that aren’t doing anything,” Alan Greene, a Singapore-based credit analyst at Moody’s Investors Service, said in a phone interview. “Vedanta’s credit profile is hanging on ok due to earnings from its oil and gas and zinc units, but is vulnerable to any downturn in these businesses.”
Vedanta Resources fell as much as 5.7 percent to 1,132 pence and traded at 1,145 pence as of 12:12 p.m. in London.
The plight of the Niyamgiri tribes attracted global attention from human rights activist Bianca Jagger and protests on the streets of London, drawing parallels to the fictional Na’vi aliens in the James Cameron film. ‘Avatar’ is the top-grossing film in history, with $2.78 billion in sales worldwide, according to Box Office Mojo.
Starring Sam Worthington and Zoe Saldana, the film is an account of humans mining the precious mineral unobtanium on Pandora, a habitable moon in the Alpha Centauri star system in the mid-22nd century. At risk is the existence of the local Na’vi tribe, indigenous to Pandora.
Santosh Sarangi, secretary for Odisha’s scheduled tribe and scheduled caste development department, said he will submit a report on the village polling to the environment ministry in the first week of next month.
The meetings, which took place in 12 villages in two districts of the state, took more than a month to complete because of the difficult terrain and the lack of road and phone connectivity, Padhi said yesterday in a phone interview. The court and the government officials, responsible for organizing the meet, had to trek for many miles to reach some of the villages, he said.
In August 2010, India had dismissed Vedanta’s mining plans in Niyamgiri Hills on concerns it would affect tribes and wildlife. A four-member panel assessing Vedanta’s proposal said in an Aug. 16, 2010 report “allowing mining in the proposed lease area by depriving two primitive tribal groups of their rights over the proposed mining sites in order to benefit a private company would shake the faith of tribal people in the laws of the land.”
While Vedanta has repeatedly claimed the tribes were in favor of mining at Niyamgiri Hills, the Dongria have shown this to be untrue, Stephen Corry, director at a London-based advocacy group for tribal people Survival International, said yesterday in an e-mail.
The Niyamgiri villagers were asked to decide the fate of the project on April 18 by the nation’s top court, which intervened in the case after Vedanta’s partner Orissa Mining Corp. contested the environment ministry’s August 2010 view that granting a mining permit would damage the environment and displace the tribes and wildlife in the area. Tribal right over land is recognized and the local authority of the tribes must clear the proposal, a three-judge panel headed by Aftab Alam of the Supreme Court had said in its April 18 ruling.
Vedanta, which has invested 500 billion rupees ($7.8 billion) to build a smelter, refinery and power plant near Niyamgiri, currently operates a 1 million ton refinery, a 500,000 tons smelter unit and a power unit. The refinery that had stopped output in December following bauxite shortage, restarted last month after raw material availability improved.
Vedanta had to shut the refinery after permits held by bauxite miners in the neighboring states of Jharkhand and Chhattisgarh expired. The environment ministry said March 13 the mines don’t need fresh approvals to renew their licenses, paving the way for replenishments of the ore.
“As a whole, we would like to see them operating the aluminum assets they have got fully,” Greene said. “It’ll be a big negative if it drags on and on.”