The Orissa Mining Corporation (OMC), an SPV jointly formed by the Orissa government and a Vedanta firm, has moved the Supreme Court challenging the environment ministry?s August 2010 decision to block the British mining giant?s plan to mine bauxite in the Niyamgiri hills of Kalahandi district in the state.

OMC has alleged that the ministry?s decision virtually neutralised the apex court?s earlier orders that allowed it to divert 660.749 hectare of forest land to undertake bauxite mining in the place.

Since the mining lease at Niyamgiri hills was in the name of OMC, the corporation had found itself in a tight spot after MoEF had on August 24, last year rejected Stage-II forest clearance for the Anil Agarwal firm?s mining project in Lanjigarh, which is spread over Kalahandi and Rayagada districts.

Vedanta wants to dig open-cast mines in the Niyamgiri hills to feed an alumina refinery it has already built in the area, as part of an $800-million project expected initially to produce one million tonne of alumina per year.

The ministry had last year struck down plans by the state-owned OMC and Britain?s Vedanta Resources subsidiary Sterlite Industries to mine bauxite to supply Vedanta?s nearby aluminium refinery on the ground that the British firm had showed ?blatant disregard? for local tribal groups in the eastern state who deem the land as sacred. OMC, on behalf of the state government, has filed an application against the ministry for overruling the the apex court?s orders of November 23, 2007 and August 8, 2008 on the allocation of Niyamgiri bauxite mine to Sterlite.

?… the impugned decision of the ministry reopens issues that stood concluded by the judgments of this court and in substance and in effect, overrules the decision of this court,? the application stated. It added the apex court?s decisions, which were delivered more than 2 years ago, had examined the issue in ?great depth? after considering four reports from the Central Empowered Committee as well as other government institutions. OMC counsel PS Sudheer said the arbitrariness and the adhocism of the ministry?s rejection was further apparent from its own decision in granting forest clearance to SAIL for carrying out mining in the Chiria iron ore mine. MoEF in the case of SAIL has ?relied on principles of sustainable development which are conspicuously absent in the impugned decision of MoEF rejecting the clearance to OMC,? the application stated. OMC said the rights of the tribal groups and dalits were covered by the SC?s directions and MoEF itself was a party to the proceedings .

MoEF did not raise any objections over the studies conducted at its instance and also went ahead in granting the stage-I clearance, OMC said while seeking a direction to the ministry to grant stage-II forest clearance to the project.

The Supreme Court in 2007 and 2008 declined permission to VAL to mine bauxite for its proposed aluminium project in Orissa, but had left a door open for Sterlite Industries to extract the mineral in collaboration with state agencies.

Emphasising on safeguarding the rights of local tribal people, the court had said that ?adherence to sustainable development is a constitutional requirement?.

The special forest bench had then asked Sterilite to deposit Rs 55 crore as Net Present value, Rs 50.53 crore towards a wildlife management plan, Rs 12.20 crore towards tribal development as well as 5% of its annual profits from mining throughout India and interest or Rs 10 crore whichever was higher for development of the region.