The New Deli Government in India has ordered Vedanta Resources not to proceed with its bauxite mining project in Orissa’s Niyamgiri hills until local tribal communities give consent.

A government panel said that allowing Vedanta to mine in the area would shake the faith of tribal people in India’s laws, reports the oneindia website.

Local sources claim the mining company is illegally occupying 26.123ha of forest land.

Vedanta Alumina, part of the Anil Agarwal-promoted Vedanta Resources, however, said that mining permission in the hills was essential for it to reduce the cost of production.