In a major relief to the Vedanta group, the Supreme Court of India today cleared the proposal of mining of bauxite by the Sterlite Industries India Limited (SIIL) in the Niyamgiri hills located in the Kalahandi district of Orissa.
In the process it allowed diversion of 660.749 hectares of forest land for the Rs 4,000-crore alumina refinery of the company. The Lanjigarh unit, which is operational since August last year, was running on bauxite sourced from outside the state with the captive mining issue pending before the court.
The apex court’s clearnce comes after the Orissa government,Orissa Mining Corporation (OMC) and the SIIL un-conditionally complied with its earlier order for putting in place a rehabilitation package for the local triblas and other conditions.
Welcoming the judgement, C V Krishnan, director, business development of Sterlite Industries said, “we will comply with the guidelines and safeguards laid down by the court which includes setting aside Rs 10 crore or 5 per cent of the profit of the plant, which ever is higher for all round development of local tribals”. Stating that this is the first time the court has linked a mining project with peripheral development, he said, it is a win-win situation for the company, the state government and the local tribals”.
However, the court has not agreed for the formation of the special purpose vehicle (SPV) for sourcing of raw material as suggested by the Central Empowered Committee of the Supreme Court and said that the earlier joint venture between OMC and Vedanta for the purpose of mining of bauxite will only be replaced by SIIL.
Refering to the agreement of VAL with the state owned Orissa Mining Company (OMC) for getting the raw material linkage, the apex court, in its judgement on 23 November, 2last year had stated that since Vedanta Resources Plc is not an Indian company, it will not have any objection if its Indian subsidiary is made the joint venture partner.
Similarly, Orissa government was required to float a Special Purpose Vehicle (SPV) for scheduled area development of Lanjigarh project.The government of Orissa (GoO), OMC and the Sterlite Industries (India) Limited were to be the stakeholders in the proposed SPV.
Accordingly, all the three partners have agreed about the formation of this SPV. The shareholder’s agreement has been accepted by the Orissa government and the SPV is in the process of being formed.
It will look after the development of the scheduled areas in 50 kilometre radius and will work for the development of health, education and agriculture.The SPV shall be incorporated under the Companies Act, 1956 and the accounts of the SPV will be preapared by the statutory auditors of OMC.
Besides, the SPV will be in control of the total mines management.The tree felling will be permited only under the supervision of the forest department officials.
The apex court had instructed that Sterlite Industries (India) Limited (SIIL) shall pay Rs 55 crores towards Wildlife Management Plan for Conservation and Rs.50.53 crore for Management of wild life around Lanjigarh bauxite mines.
“The bauxite mining project along with alumina refinery in Kalahandi will bring significant employment and economic livelihood for the local people and overall development for the region”, Krishnan added.
