In March 2023, the Government of Odisha granted a 50-year mining lease to Vedanta Limited for the captive extraction of bauxite in the Sijimali Hills located in the Rayagada and Kalahandi districts. Both districts fall under the Fifth Schedule of the Constitution and are designated as Scheduled Areas. These regions are predominantly inhabited by Kui and Katia Kondh tribal communities and are rich in dry and moist deciduous forests, grasslands, and biodiversity. The Sijimali project is expected to displace nearly 100 families from 18 villages and adversely affect the livelihoods of more than 500 families. The Rayagada district administration recently (in April 2026) commenced the construction of a 3-kilometre-long road stretching from Purulang to the Sagabari Valley to facilitate easier access to the Sijimali mining site. This move met with strong opposition from local residents, particularly the Kui and Katiya Kondh tribal communities. They allege that this project poses a threat to their land, livelihoods, and the environment. Over the past decade, both districts have witnessed a decline in forest cover, primarily due to bauxite mining activities. The proposed Sijimali bauxite mine spans 1,549 hectares, of which 699 hectares consist of forest land.
The primary objective of Vedanta Limited’s bid for Sijimali Mine is to ensure a continuous supply of bauxite for its 5 MTPA alumina refinery located in Lanjigarh, Kalahandi. The Sijimali mine has an estimated reserve of 311 million tonnes in the Rayagada/Kalahandi region.
The Expert Appraisal Committee (EAC) on Non-Coal Mining under the Union Ministry of Environment, Forest and Climate Change recommended granting environmental clearance to Vedanta’s Sijimali bauxite mine project during its meeting held on May 15, according to the minutes of the EAC meeting.
This recommendation for environmental clearance is subject to the specific condition that “no mining activity shall be undertaken within the 709.72-hectare area without obtaining Stage-II Forest Clearance.”
Currently, the ownership of this project rests with Vedanta Limited, whose parent company is Vedanta Resources headquartered in London. Vedanta is one of India’s largest mining and metals corporations, with operations spanning bauxite, aluminium, zinc, iron ore, oil, and gas. While the company projects itself as a symbol of “development” and “industrial progress,” many of its mining projects have consistently faced allegations of environmental destruction, tribal displacement, human rights violations, and administrative irregularities. The Niyamgiri case, the Sterlite plant in Thoothukudi, and now the Sijimali bauxite project are major examples.
Ironically, Vedanta Resources had earlier failed in its attempt to mine bauxite in the nearby Niyamgiri Hills, home to the Dongria Kondh tribal community. The historic resistance led by the Dongria Kondhs became a global symbol of indigenous resistance, as they fought to protect their rights, culture, and land from corporate mining interests.
Owing to the protests in 2010, the Union government refused to grant Stage-II Forest Clearance for the diversion of 660 hectares of forest land for mining in Kalahandi and Rayagada districts. The decision was based on adverse recommendations made by the Forest Advisory Committee, which expressed serious concerns regarding tribal rights, ecological balance, and biodiversity.
The matter eventually reached the Supreme Court of India. In its landmark judgment dated April 18, 2013, the Court ruled that approval from Gram Sabhas was mandatory for the mining project. Later that year, all 12 Gram Sabhas unanimously rejected the proposed mining plan in the ecologically sensitive Niyamgiri Hills, delivering a major setback to Vedanta.
Despite this history, the company continues to claim that it has developed a comprehensive ESG (Environmental, Social and Governance) framework and remains committed to achieving “Net-Zero” carbon emissions by 2050. It has also announced plans to invest $5 billion over the next decade. According to the company, this investment will be directed toward decarbonisation initiatives, renewable energy projects, clean fuels, water-positivity goals, the electrification of mining operations and vehicle fleets, and comprehensive sustainability measures across its entire operations.
However, Vedanta’s bauxite projects in Odisha continue to raise serious concerns. The Lanjigarh refinery was established without securing adequate mining approvals beforehand, leading to raw material shortages and rising operational costs. This reflects a major failure in investment planning.
One of the most critical questions is: who is financing such controversial projects? According to publicly available information, Vedanta Limited reportedly carries outstanding liabilities and debts amounting to approximately Rs 9,45,96,04,52,020 owed to various banks and trustee institutions. These include Bank of India, ICICI Bank, Power Finance Corporation, Aditya Birla Finance, and DBS Bank. Similarly, Mythri Infrastructure and Mining India Private Limited, which has been contracted by Vedanta Limited to run the mining operations at Sijimali captive block, is supported by loans from a slew of Indian banks such as Axis Bank, ICICI Bank Limited, Karur Vysya and many more.
The investments made by these institutions are not merely “private capital”; they essentially involve public savings, pensions, insurance funds, and other forms of public money. This raises an important ethical question: should public funds be used to finance projects accused of human rights violations, environmental destruction, and the erosion of tribal rights? Should there be accountability mechanisms at the level of banks to scrutinise and address such concerns?
Financial institutions often claim to follow ESG standards. However, in reality, many investment decisions continue to be driven primarily by profit considerations. If a project proceeds without the consent of local communities, damages the environment, and creates social conflict, investors ought not to escape responsibility.
Another crucial question is why financial institutions should invest public money in projects that may generate severe social, environmental, and climate-related harm. Numerous mining projects across the country have resulted in displacement, land degradation, water pollution, and the destruction of traditional livelihoods.
If public money is being used for such projects, financial institutions have a responsibility to conduct rigorous assessments of human rights, environmental, and climate impacts before investing. Strong accountability mechanisms and effective grievance redressal systems must also be established so that affected communities can directly raise concerns about rights violations and project impacts. Development should not be reduced merely to economic profit; it must also prioritise social justice and ecological balance. There should also be policies for withdrawing investments in cases involving human rights or environmental violations.
Today, the Sijimali project increasingly appears less like a model of economic development and more like a “case study” in policy and governance failure.
This case demonstrates that investments lacking social acceptability and ecological balance can eventually give rise to contestations on the ground.
The Sijimali bauxite project is frequently promoted in terms of “economic growth” and “revenue generation.” But what about the ethical, social, and environmental costs imposed on local communities and ecosystems?
Deforestation, depletion of water sources, pollution-related diseases, and the destruction of livelihoods are all “hidden costs” that rarely enter official economic calculations. Revenue may be visible, but the true cost of destruction remains invisible and unaccounted for.
Despite intense opposition from tribal communities, their natural resources are often handed over to private corporations at undervalued rates. If development pushes local populations toward displacement and poverty, then it represents an economically failed model. Once the bauxite reserves are exhausted, what will remain are barren lands, water scarcity, and long-term economic distress. What often remains away from the spotlight is the role of financial institutions which support such projects, without any sense of responsibility towards the environmental, social consequences of their investments.
This struggle is not merely an act of protest or obstruction. It is a sign that somewhere within the current model of development, there exists imbalance, injustice, and neglect. It compels society to reflect upon the kind of future it truly wishes to build.
Deepmala Patel works as a researcher at the Centre for Financial Accountability
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth