He made this clear against the backdrop of rejection of clearance to London-based Vedanta's USD 1.7 billion bauxite mining project in Niyamgiri in Odisha.
"I have rejected the Niyamgiri because all the panchayats have rejected the proposal.....When the panchayats reject, we cannot go ahead with it. We have made a rule that if the Panchayats (reject), we cannot (grant clearance)," Moily told PTI in an interview.
Asked whether he was setting a precedent, the Environment Minister said, "I cannot help.... I cannot help".
Moily had last week rejected Vedanta's proposal to mine the Niyamgiri hills after 12 village councils of Dongriya Kondh tribal groups opposed the project in their forests.
The Supreme Court had recently stalled the project till gram sabhas of Rayagada and Kalahandi districts in the state give clearance to it.
The apex court had directed the gram sabhas of the two districts to decide in three months the issues arising out of the mining project, including that of the tribals residing in the area.
Vedanta proposes to set up alumunium refinery with a capacity of one million tonne per annum at Lanjigarh in Kalahandi and has invested Rs 5,000 crore for it.
Bauxite, the main alumunium ore, for the refinery was to come from Niyamgiri mines.
The company reportedly shut down the refinery in December 2012 due to bauxite shortage and resumed production partially in July last year.
Mining from Niyamgiri is crucial for Vedanta's plans to expand the refinery to five million tonnes.
Congress Vice President Rahul Gandhi was also opposed to the project when he visited Lamjigarh in 2010. He had supported tribals of the area and vowed to fight for their cause.
"True development takes place by respecting interests of the poor and tribals and not by muffling their voice," he had said and assured them that he would be their "soldier" in Delhi and continue their fight.