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Plans by Vedanta Resources to begin bauxite mining in Orissa suffered a setback after a government team said the company was violating environmental guidelines, officials said on Monday.
"Displacement, loss of livelihood, pollution, non-payment of compensation of land and objections to the project and its effects are some of the causes for discontent and protest," a report submitted to the Ministry of Environment and Forests last week, and seen by Reuters says.
"These are aspects that are integral to the lives of the Dongria Kondh (local tribespeople) and do not appear to have been considered while deciding to open up the mountain top for mining," the report says.
Vedanta wants to mine bauxite for its alumina refinery in Orissa, but the project, bogged down since 2005, is opposed by tribes people who fear losing their homes and livelihood.
The Supreme Court approved the project in August 2008 after years of legal wrangling and Vedanta were waiting for an environmental clearance, the final hurdle of the project.
Its subsidiary company Sterlite Industries, co-owned by the Orissa government, plans to start mining once clearance is given by the central environment ministry.
A senior Vedanta official said the Orissa government had cleared their project and that the company has not violated environmental norms.
"We are hopeful that based on this (state government) report the environment ministry will give us approval for the project," Mukesh Kumar, chief operating officer of the project in Orissa's Lanjigarh area, told Reuters late on Monday.
AMR Daliwal, Orissa's Steel and Mines Secretary said he was still awaiting the central government report before taking any further decision.
"As far as our investigation is concerned there was no such violation," he said in Bhubaneswar, capital of Orissa.
Vedanta has regularly denied allegations that its planned bauxite mine would violate the rights of thousands of poor indigenous tribes people, saying that all its projects are conducted within the law and using international best practices.
The company says it plans to mine less than one percent of the mountain range to produce one million tonnes of alumina annually and has already invested USD 22 million in development work.
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