In a major setback to Anil Agarwal-promoted Vedanta Resources, the Ministry of Environment and Forests has turned down its proposal for bauxite mining at Niyamgiri hills in Odisha. Vedanta wanted to mine bauxite from Niyamgiri to feed its Rs 5,000-crore >Lanjigarh alumina refinery in Odisha .

“We have rejected the project. It was turned down by gram sabhas,” M Veerappa Moily, Minister for MoEF, said on Sunday.

The State Government held nearly 12 gram sabhas, commonly known as meeting with villagers, across Kalahandi and Rayagara districts. The inhabitants of these places, mainly tribals, have opposed the bauxite mining project. Last year, the State informed the Centre of the locals’ objections for the project.

“Till now, around Rs 1.50 lakh crore worth of projects have been cleared by MoEF,” he added. Moily has been given additional charge of MoEF on December 24.

The MoEF has rejected the stage-II approval under the Forest (Conservation) Act, 1980. This prevents diversion of more than 660 hetares of forest land in the two districts of Odisha for mining.

The clearance for this project had taken a ‘political’ twist in recent years. There seems to be a difference of opinion between the State and Centre with regards to Vedanta’s project.

The Odisha Chief Minister Naveen Patnaik-led Biju Janata Dal (BJD) reportedly wanted the bauxite mining project to go ahead. But, Congress Vice-President Rahul Gandhi visited the locals in the districts and extended his support to them.

Vedanta joined hands with Orissa Mining Corporation (OMC) for exploring bauxite in the area. Now, it has to be seen if the Government will allocate the company any other mine to explore bauxite.

After the MoEF decision, Odisha Steel and Mines minister R.K. Singh has been quoted saying, "It is unfortunate that the UPA government is doing politics at the cost of development. We condemn the Centre for rejection of the mining proposal at Niyamgri hills."