Vedanta's refinery expansion plan rejected; faces legal action

Environment Ministry asks the company to maintain status quo at the site

October 22, 2010 12:33 am | Updated November 28, 2021 09:36 pm IST - NEW DELHI:

In another setback to Vedanta Aluminium's Orissa ambitions, the Environment Ministry has rejected its plan to expand its Lanjigarh refinery six-fold and directed the State government to take legal action against the company for illegally beginning the expansion without permission.

This comes almost two months after the government rejected the company's proposal to mine bauxite in the Niyamgiri Hills near the refinery in Kalahandi district. Both decisions were taken on the basis of the N.C. Saxena Committee report that detailed the company's violations of environmental norms.

The Vedanta Aluminium had a $5.8-billion plan to increase the production capacity of its Lanjigarh alumina refinery from the current one million tonnes to six million tonnes per annum.

In a letter dated October 20 to the Vedanta, the Ministry directed it to “maintain status quo at the site and no further construction activity shall be undertaken with respect to the expansion project.” The terms of reference granted to the company, as well as the public hearing conducted in April 2009 were cancelled. The Secretary of the State Forest and Environment Department was directed to take action against the company under the provisions of the Environment Protection Act, 1986.

At a hearing held by the Ministry on September 30, the Vedanta officials admitted that they had completed 40 to 45 per cent of the construction work for expansion despite the fact that they had no prior environmental clearance. They pleaded that the clearance could now be granted “considering the magnitude of the project and the wide ranging benefits,” including a 5 per cent profit sharing with the local community mandated by the Supreme Court. “They are ready to pay any penalty for violation but not to stop the project,” according to the minutes of the hearing.

In another order, the Ministry asked the Vedanta Aluminium to put strict pollution monitoring and control facilities in place at the existing one million-tonne per annum refinery, and also develop a green belt in 25 per cent of the plant area. It will not be allowed to source bauxite from any mine without prior environment clearance. It was also asked to submit a Rs. 10 crore bank guarantee to the State pollution control board to ensure its compliance with these directions.

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