Vedanta says India bauxite mine will benefit poor

By Nita Bhalla NEW DELHI, Nov 26 (Reuters) - The chief executive of the mining group Vedanta Resources on Thursday said a planned bauxite mine in India would benefit thousands of poor tribespeople, rejecting complaints by rights groups. Vedanta wants to mine bauxite for its alumina refinery in eastern Orissa state, but the project, bogged down since 2005, is opposed by activists who say it will rob vulnerable residents of their ancestral home and traditional way of life. CEO Mahendra Mehta said most activists were misinformed, adding that the poor who live around the Niyamgiri Hills would benefit from job opportunities and local development. "There is a lack of awareness of the facts," Mehta said in a phone interview from the city of Udaipur. "No tribal or anyone lives in the mining area and no disturbance to their life or displacements will happen. The benefits of mining automatically and immediately go to the local people in the vicinity." Vedanta has said it has the confidence of the indigenous people, but in October, a British government agency said the company had failed to consult enough with one community likely to be affected. India's Supreme Court approved the project in August 2008 after years of legal wrangling. Mehta said the process of obtaining the court's approval showed fears were baseless. Vedanta officials say they are now at the final hurdle of the project. Its subsidiary company Sterlite Industries , co-owned by the Orissa state government, will start mining once clearance is given by India's environment ministry. But groups like ActionAid say the hills are home to three vulnerable tribes -- the Dongria Kondh, Kutia Kondh and the Jharania Kondh -- protected by the constitution and activists say 8,000 people rely on the mountain for water, fruit and animals. Mehta said the London-listed company planned to mine less than one percent of the mountain range, to produce one million tonnes of alumina annually. "Some notions people have is that the whole hill will be destroyed," Mehta said. "Those are misguided and misinformed notions." The company says it has invested $22 million in development, providing nutrition to children and infrastructure projects. Officials say once mining begins, they will invest a further 5 percent of profits in community-based projects every year. Former shareholders of Vedanta, the Norway Pension Fund and Edinburgh-based investment fund Martin Currie, have in recent years sold off their assets on ethical grounds, which activists say proves their concerns are valid. (Editing by Matthias Williams and Ron Popeski)