Vedanta awaits ruling on contentious Orissa mine

Vedanta Resources is bracing itself for a crucial ruling by the Indian government this week on the company's planned bauxite mine in the eastern state of Orissa, which could finally lead to a decision on whether the project gets the go-ahead.

The London-listed mining giant is expecting to hear the opinion of India's Forest Advisory Committee within the next few days. The committee has already been advised by a panel of experts that Vedanta should not be granted permission for the mine.

This month, the Saxena panel, which was appointed by New Delhi to investigate claims that Vedanta's proposed excavations in the Niyamgiri hills would destroy the lifestyle of the Dongria Kondh tribe, said: "Allowing mining in the proposed mining lease area by depriving two primitive tribal groups of their rights ... to benefit a private company would shake the faith of the tribals in the law of the land".

Vedanta has been seeking permission to build the mine for years, but has faced a tide of anger from a host of human and environmental rights groups, who say the mine would ruin the lives of the Dongria Kondh.

The committee's recommendation will be passed to India's environment minister, Jairam Ramesh, who will make the final decision.

"The Dongria and their thousands of supporters around the world are waiting anxiously for this decision," said Jo Woodman, of Survival International, the campaign group which supports tribal peoples. "Last time I was with them, they told me again and again how they would not give up fighting to save their mountain.

"I just hope the minister has heard that message loud and clear, and recognises the damage to India's reputation in allowing the mine to go ahead would cause."

Vedanta has dismissed Survival's statements, and those of Action Aid and Amnesty International, as a "hoax". The company says very few of the Dongria Kondh live near the mine, adding that the economic benefits of the project far outweigh concerns.

Issuing a statement to coincide with its annual general meeting last month, the company said: "Vedanta strongly denies any allegations of pollution of the environment in Lanjigarh or of any violation of human rights. Vedanta is working closely with 2.5 million people spread across 425 villages in India and will be benefiting the lives of another 1.6 million under-privileged children in the coming two to three years through its various [corporate and social responsibility] programmes."

But, faced with protests at the AGM and a move by the activist investor group Pirc to unseat several board members, Vedanta realised that its policy of ignoring criticism was not working. Aviva was among the institutional backers to vote against the group on three resolutions at the AGM.

Vedanta's reassurances have also failed to persuade ethical shareholders, including the Church of England and the Norwegian state pension fund, which have sold their holdings in the group in protest at its record.

Several celebrities have also lent their support to the campaign. Last week, the actress Joanne Lumley said: "I am gravely concerned that Vedanta is pushing ahead with this terrible project which would lead to the destruction of the life of the Dongria Kondh, which flies in the face of civilised behaviour, and ill suits a company of [its] size and wealth."

Mr Ramesh's decision will almost certainly be appealed.