Saturday, May 10, 2008

SC panel curbs Sterlite mining SPV stake

Sify, India, May 10, 2008
Rakesh Bhatnagar/ DNA MONEY
Saturday, 10 May , 2008, 08:49

New Delhi: An environment regulatory committee set up by the Supreme Court has recommended a stringent mechanism for granting mining lease to Sterlite Industries, the parent company of the London-based Vedanta Alumina Ltd, to mine bauxite from the eco-sensitive Niyamgiri hill area for its proposed Rs 4,000 crore aluminium project in Orissa.

As against the plea by the Sterlite India, the Central Empowered Committee suggested that the majority 51% share in the special purpose vehicle — ‘Lanjigarh Scheduled Area Development Foundation’ — should be with the Orissa government and 24.5% each should be with the Orissa Mining Corporation (OMC) and Sterlite.

The Sterlite had suggested that its own share should be 49%, while the Orissa government and OMC should hold 26% and 25%, respectively.

A bench of chief justice K G Balakrishnan, justices Arijit Pasayat and H S Kapadia directed Sterlite and the Orissa government to file affidavits on the formation and constitution of the special purpose vehicle.

The court adjourned the matter till next Friday and asked the parties to file the details by then.

Sterlite has sought direction from the court to accord clearance of the forest diversion proposal submitted by Orissa Mining Corporation for diversion of 660.749 hectare of forest land to undertake bauxite mining on Niyamgiri Hills in Lanjigarh for its Rs 4,500 crore Alumina plant in Orissa.

Sterlite has agreed to give 5% of the annual profits before tax and interest from the Lanjigarh project, consisting of bauxite mining and alumina refinery, or Rs 10 crore per year, whichever is higher, to the Foundation every year from April 1, 2007.

Sterlite also said it would make a payment of the net present value (NPV) of Rs 55 crore and Rs 50.3 crore towards wildlife management plan for conservation and management of wildlife around the Lanjigarh mine and Rs 12.2 crore towards development for the tribal people.

The committee said there has to be a balance between conservation and development. “The balance between these two would thus lie in permitting conservation not merely for private profit but in a manner that maximises the public interest component in the activity,’’ it said.

In its report to the apex court, the Central Empowered Committee said: “It is necessary to evolve norms for sustainable development of eco fragile areas and eco sensitive areas where the need for development is such that it warrants development activity at an environmental cost in such areas.”

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