India has rejected Vedanta Resources' proposed bauxite mining plan for the Niyamgiri Hills in Odisha state.
The company planned to mine the Niyamgiri hill range, which is believed to be the home of deity Niyam Rajawhich, who is worshipped by the local Dongria Kondh tribe.
Indian Environment Minister Veerappa Moily said the proposal has been rejected after it was opposed by local panchayats.
"That's what we're doing for most projects," Moily said.
Vedanta Resources is an India-focused metals and mining company headquartered in the UK.
The company formed a joint venture with the state-owned Orissa Mining Corporation to develop the Niyamgiri mine, under a memorandum of understanding.
The proposed project was expected to supply 72 million tonnes of bauxite to the company's alumina refinery plant, located at the Lanjigarh, Orissa.
Vedanta Aluminium's one million tonne per year alumina refinery project was forced to import bauxite, as it was struggling to get raw material for the refinery.
In April 2013, India's top court ruled that the decision to allow Vedanta Resources to mine bauxite in two districts of Orissa state rests with local tribes.
Following this, the state decided to hold meetings in 12 villages to discuss the environmental and religious issues, and the rights of the tribes. The tribes opposed Vedanta's plans and the propsal was rejected.
The Environment Ministry originally rejected Vedanta's proposal to mine bauxite from the Niyamgiri Hills in 2010.
However, Vedanta and its partner, the Odisha Mining Corporation, filed an appeal with the Supreme Court against this decision.
Image: India is one of the largest producers of bauxite in the world. Photo: courtesy of Werner Schellmann.