* Vedanta was denied permission for bauxite mines

India's environment ministry said on Wednesday it has found "serious violations" of green laws in Vedanta's existing alumina refinery in eastern India, the latest in the London-based firm's mining troubles in India.

In a letter to the company posted on the ministry's Website on Wednesday, it also asked Vedanta to explain why the environment clearance given to its one million tonnes-a-year plant in Orissa state should not be revoked.

The move comes within days of the Indian government rejecting the group's plans to mine bauxite in Orissa over environmental concerns, a blow to a company already facing hurdles to a planned $9.6 billion acquisition of a stake in Cairn India.

The latest government notice puts Vedanta's alumina refinery under cloud. The company has plans to expand the refinery's annual capacity to six million tonnes. Vedanta's project in Orissa is valued at about $9.5 billion.

The latest violations were found by an environment ministry inspection team which said, among other breaches, the Vedanta refinery was running on bauxite sourced from mines that did not have green clearance.
 

"It may be noted that if no response is received within 15 days, appropriate orders as deemed fit will be passed," the ministry's letter said.

 

It counted closure of the refinery as one of the possible steps if a satisfactory explanation was not given.

 

A Vedanta spokesman could not comment immediately.

 

Vedanta is among several top corporations, including South Korea's POSCO, whose Indian projects face delay as a proactive environment ministry tightens rules that often brings it in conflict with other government ministries pushing for rapid industrialisation.

 

The company had said last week there were no regulatory violations of any kind at its refinery in Orissa's Lanjigarh area.

source:Reuters