Vedanta Resources has cut its investment plan by $2bn and deferred its planned aluminium expansion after the company was denied a licence by the Indian Government to mine bauxite in Orissa.

Vedanta Resources CEO Mahendra Singh Mehta said the capital expenditure revision will have an impact of $1.5bn-$2bn.

The company has suspended work on its Lanjigarh alumina refinery expansion and postponed the first metal tapping at the Jharsuguda-II and Korba smelter projects.

The Environment Ministry of India denied a bauxite mining licence in Niyamgiri Hills on concerns it would affect tribes and wildlife.