Vedanta refinery may hit hurdle

Oct 21, 2010 |

Reuters

New Delhi, Oct. 10: The government is likely to halt this week London-listed miner Vedanta Resources’ plans to expand its alumina refinery in Orissa due to serious violation of environmental laws, government officials said on Wednesday.

If halted, the move — which comes two months after the government rejected the firm’s plans to mine bauxite in Orissa over environmental concerns — would be another blow to Vedanta, already facing hurdles to a planned $9.6 billion acquisition of a stake in Cairn India.

Vedanta operates a one million tonne-a-year alumina refinery in Orissa and wants to expand its capacity by six times. The company’s project in Orissa is valued at about $9.5 billion.

In August, the environment ministry asked the company to explain why the green clearance given to its refinery should not be revoked after a probe found it violating laws, including sourcing bauxite from mines that did not have green clearance.

The company said last week there were no regulatory violations of any kind at its refinery in Orissa’s Lanjigarh.

The officials said environment minister Mr Jairam Ramesh was likely to take a final decision on Vedanta this week.

“There is procedural violation of the regulation in Vedanta refinery while there is serious and unambiguous violation in the expansion plan,” a senior environment ministry official said.

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