India's Supreme Court allows mega-mining and steel projects

Aug 8, 2008, 12:12 GMT

New Delhi - India's Supreme Court Friday approved two controversial mining and steel projects in the eastern state of Orissa that were delayed owing to protests from tribal people and farmers, media reports said.

The court in New Delhi allowed British metal and mining group Vedanta Resources to go ahead with its 800-million-dollar bauxite mining project in the Niyamgiri hills in Kalahandi district in south-western Orissa, the NDTV network reported.

The apex court had barred the company from mining in November following protests by the Dongria Kondh tribe who consider the Niyamgiri hills sacred.

A three-judge bench headed by Indian Chief Justice KG Balakrishnan said the group will have to pay 10 per cent of its profits or 100 million rupees (2.4 million dollars) - whichever is more - for the welfare of the tribe.

Tribal activists are against the project, saying the mines will force locals from their homes and divest them of their livelihoods. Environmentalists also oppose the project on grounds that it would damage the ecology of the region.

The Supreme Court also gave a nod to plans by the South Korean steel firm Posco to acquire land for its 12-billion-dollar plant in Orissa's Jagatsinghpur district.

The world's fourth-largest steelmaker will now have access to 3,000 acres (about 1,200 hectares) of forest land in addition 1,000 acres it obtained earlier, the report said.

The Posco project, which is India's largest foreign investment, has been delayed since the company signed an agreement with the state government in 2005, owing to opposition from farmers angry over being displaced from their lands.

Although both companies have welcomed the Supreme Court ruling, local media reported that the decisions were being viewed with resentment by the tribal people and farmers, who were likely to step up their protests in the coming days.