9 Aug 2008

Supreme Court approves mining projects in India

10:22 am on 9 August 2008

India's Supreme Court has said two huge and controversial mining projects can proceed in the eastern state of Orissa.

The ruling follows fierce protests by farmers, campaign groups and tribes who have vowed to oppose the projects.

Orissa is one of India's poorest states.

The British-listed mining group Vedanta can now use bauxite from a mountain in Orissa which hill tribes view as sacred.

In a separate ruling, South Korean steel firm Posco was given the go-ahead for a $US12 billion plant in the same state. It is to be the biggest direct foreign investment in India.

Vedanta has an agreement with the Orissa state government to set up a bauxite refinery in the Niyamgiri mountains. Niyamgiri is rich in bauxite, from which aluminium is derived.

Vedanta has already invested $US1b to build a giant alumina refinery close to the mountain.

The court has said Vedanta must invest at least $2.5m in the area to help local tribes.