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Apr 18, 2013 at 12:27pm IST

Vedanta can mine in Odisha's Niyamgiri Hills if Gram Sabha allows: Supreme Court

New Delhi: Vedanta will be allowed to mine in the Niyamgiri Hills in Kalahandi district of Odisha only if the Gram Sabha allows, said the Supreme Court on Thursday, adding the final decision on the project would be taken by the Ministry of Environment and Forests in consultation with the Gram Sabha.

The Gram Sabhas of Rayagada and Kalahandi districts of Odisha will decide in three months on issues arising out of bauxite mining project in Niyamgiri Hills, said the apex court. The Environment Ministry will take action on the report of the Gram Sabhas in the next two months, it added announcing the judgement.

In 2008, the Supreme Court had given phase 2 clearance to Vedanta to mine at Niyamgiri but after Congress vice president Rahul Gandhi's rally in Kalahandi, the Ministry of Environment and Forests cancelled the clearance in August 2010.

The project was cancelled in August 2010 after a report highlighted various environmental threats and the endangering of the Niyamgiri's Dongria Kondh tribe. Vedanta and the Odisha Mining Co-operation, who are the original lessee of the mines, had then moved the apex court challenging the cancellation.

The mining project was planned to supply up to 150 million tonnes of bauxite to Vedanta Aluminium, India's largest producer of the metal, for a 1-million-tonne a year plant in the state that was shut in December because of lack of the raw material. India, the world's fifth-biggest producer of bauxite, has been limiting its issue of bauxite leases, mainly because of protests over land acquisition.

(With additional information from PTI and Reuters)