On October 5th, 2004 an official agreement was signed between the Orissa Mining Corporation (OMC) and Sterlite Industries, a subsidiary of Vedanta Resources plc, for the purpose of mining of bauxite reserves at at the foot of the Niyamgiri mountain, near the town of Lanjigarh.

The mining operation will have massive negative affects on the Dongria Kondh, one of India's most isolated tribes. The company is planning to mine over 1 million tonnes of bauxite a year from reserves within Niyamgiri mountain. Official studies have indicated that this is likely to lead to massive deforestation on the slopes, the destruction of protected local ecosystems rich in biodiversity, and the disruption of key water sources that supply springs and streams on the surrounding hillsides and feed two rivers which irrigate large areas of farmland in southeast Orissa.

Local communities and civil society groups have raised serious concerns about the impacts of the existing refinery operation, the proposed expansion of the refinery, and the mine. 

On March 12, 2010, a research committee appointed by the Indian government submitted a report that contradicts the claims of Orissa Government officials that the implementation of the Forest Rights Act (FRA) has been completed. The report states that there is enough to show that serious damage would be caused to the Dongria Kondh and the environment and show cause notices have been issued to Vedanta and its companies. Vedanta's plan to mine bauxite in Orissa could be jeopardised if the environment ministry accepts the findings of the report. The MOEF report was written by an appointed three-member committee, comprising Usha Ramanathan, an independent law researcher, Vinod Rishi, additional director general (wildlife) at Dehradun’s Wildlife Institute of India, and JK Tewari, chief conservator of forests, MoEF (Bhubaneshwar), with the objective to look into the various allegations against Vedanta. Read full report here.

On August 24 2010, Vedanta's plans to mine bauxite on sacred tribal land of the Dongria Khond were halted by India's environment ministry. By not granting permission for forest clearence, also the environmental clearance for the mine is inoperable. The Indian Minister of Environment and Forest Jairam Ramesh concluded that serious violation of various laws have taken place, these include the Forest Conservation Act, 1980, the Environmental Protection Act, 1986, the Scheduled Tribes and Traditional Forest Dwellers Act, 2006, and many others, and that his Ministry would examine what penal action should be initiated against the project proponenst for the violation of these laws. Read full report here.

In 2003 Vedanta signed a Memorandum of Understanding with the Orissa state government regarding the construction of a refinery for alumina production, a coal-based power plant, and a mining development at Lanjigarh in the district of Kalahandi.

In 2003 Vedanta applied to the Ministry of Forests and Environment (MoEF) for an environmental clearance for the refinery. In its application the company provided wrongful information to the effect that the refinery would not require forest land.

On 22 September 2004 the company was granted the MoEF’s environmental clearance for the construction of the refinery independently of the mining project. The approval establishes that the refinery will not require the use of forest land.However, the CEC’s investigative report shows that Vedanta one month earlier, on 16 August 2004, while the application regarding an environmental clearance for the refinery was being processed, had submitted an application for reallocation of forest land to the Forest Department at the MoEF. From the application it appears that the company will have to use forest land for the construction of the refinery, including preservation areas.

Vedanta continued the construction of the refinery. In February 2005 the MoEF’s Forest
Department issued a so-called show cause notice to the company for violation of the Forest Conservation Act and for having cleared and levelled woodland.

On 23 May 2005, the Ministry ordered the construction work at the refinery to stop. Vedanta then argued that the refinery could be built without using forest land after all, and that the MoEF’s imposition was therefore not relevant. The company then withdrew the application regarding use of forest land, something which the Ministry accepted after recommendations from Orissa state authorities. At the same time the Ministry revoked the stop order given to the company.

In its report to the Supreme Court, the CEC therefore recommended that the environmental clearance for the refinery project be revoked and the mining operation at Niyamgiri banned. The Supreme Court did not pronounce on the CEC recommendation, but referred the case to the MoEF for further analysis. The MoEF engaged the Wildlife Institute of India (WII) to examine the mining project’s expected impact on the biodiversity of the Niyamgiri Hills. The report was to be presented in court on 13 October 2006 with the Ministry’s recommendation to the Supreme Court, but during the session the MoEF requested a postponement.

The CEC prepared a new report on Vedanta, commissioned by the Supreme Court and submitted in January 2007, in which the conclusions of its previous report are confirmed
and partially reinforced.

Read full report of the Norwegian Government Pension Fund on Vedanta.

Vedanta Aluminium Limited (VAL), a subsidiary of Vedanta Resources has operated an aluminium refinery at Lanjigarh in Kalahandi district in the state of Orissa, India since 2006. In January 2009, VAL applied for clearance for a six-fold expansion of the refinery. This clearence is still pending. Vedanta is also planning to mine bauxite in the area via its subsidiary company, Sterlite Industries India Ltd.

In April 2009, the India authorities gave Sterlite and the state owned Orissa Mining Corporation permission to mine bauxite in the Niyamgiri Hills, about 10 kms from the Lanjigarh refinery.

In October 2009, the UK National Contact Point for the OECD Guidelines for Multinational Enterprises reponded to a complaint filed by the NGO Survival International in December 2008, with the conclusion that Vedanta failed to put in place an adequate and timely consultation mechanism fully to engage the Dongria Kondh. With the aim of assisting Vedanta in bringing its practices in line with the Guidelines, the UK NCP made several recommendations to Vedanta, which untill date have not been taken serious by Vedanta. Read full report here.