Vedanta under scrutiny as 100 feared dead at aluminium plant

Alistair Dawber
Friday 25 September 2009 00:00 BST

The safety policies of the London-listed mining giant Vedanta Resources are set to come under scrutiny after an accident at one of its sites in India killed as many as 100 people on Wednesday. The group has already been blacklisted by some investors over ethical and environmental concerns.

The death toll is expected to rise after a chimney collapsed at an aluminium plant in which Vedanta has a 51 per cent stake through its subsidiary Sterlite Industries. Sterlite is the builder at the site in Korba, in the central India state of Chhattisgarh.

An investigation is expected, but initial reports blamed bad weather. However, Rajeev Sharma, the south Asian head of the Building and Woodworkers' International union, said that the accident was bad, even by India's poor safety standards: "It is one of the worst accidents in India's recent construction history," he said.

Vedanta, which claims to benefit from "relatively low cost of operations and large and inexpensive labour and talent pools", expressed regret but declined to comment further.

The accident follows several embarrassing incidents for Vedanta. In 2007, the Norwegian state pension fund sold its shares, saying that being an investor would present an "unacceptable risk of contributing to severe environmental damage and serious or systematic violations of human rights".

Survival International, which promotes the rights of tribal peoples, also alleges a bauxite mine intended for the Niyamgiri mountain in India's Orissa state will destroy local forests, while the mountain itself is considered sacred by local tribes. Vedanta says it is committed to the best international standards.

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