Update on Niyamgiri Bauxite Mining

 24 August 2010

Update on Niyamgiri Bauxite Mining

The Ministry of Environment and Forests ("MOEF") in a statement issued today refused the final approval to the Orissa Mining Corporation ("OMC") proposal for the bauxite mining at Niyamgiri hills, in the state of Orissa, following the recommendation of Dr. N.C. Saxena committee.

In response to certain allegations raised in the report, Vedanta Resources plc ("Vedanta" or The "Company") reconfirms that there has been no regulatory violations of any kind at the Lanjigarh Alumina refinery. Vedanta is not in possession of the Niyamgiri mine and no mining activity has been or will be undertaken until all approvals are in place.

To recap the background, in October 2004, the Government of Orissa signed a Memorandum of Understanding ("MoU") with Vedanta to set up an integrated Alumina and Aluminium complex along with the associated captive power plant in the state of Orissa. This MoU also included supplying 150 million tonnes of bauxite for Vedanta's alumina refinery at Lanjigarh. For this the Government of Orissa identified Niyamgiri mine as the initial source of bauxite supply to the extent of 78 million tonnes.

OMC, who holds the lease of the Niyamgiri mines, applied for all approvals to commence mining from Niyamgiri. During the approval process, the mining project was extensively reviewed by the Honorable Supreme Court of India, including specific reviews by the expert committees appointed by the MOEF. The Honourable Supreme Court of India passed a favourable judgment to the project and granted the mining approval in August 2008.

The MOU with the OMC was to encourage investment in world class bauxite deposits. The natural resource rich state of Orissa has the fourth largest reserves of bauxite deposits in the world; however no new alumina refinery has been set up in the region in the last 25 years. The Kalahandi district, where the company's Alumina Refinery is located, is one of the most impoverished districts in the country. As at 31 March 2010, Vedanta had invested c.US$5.4 billion in its aluminium projects in Orissa. Around 10,000 people are employed at the Lanjigarh alumina refinery plant. Vedanta is currently operating its Alumina refinery with outsourced bauxite.

In view of the ongoing delay in approval of the Niyamgiri Mining, the Government of Orissa is actively considering allocation of alternative sources of bauxite to Vedanta's alumina refinery, from the state of Orissa.

Vedanta remains committed to working with the local communities to ensure sustainable development in this region.

About Vedanta Resources plc

Vedanta Resources plc ("Vedanta") is a London listed FTSE 100 diversified metals and mining major. The group produces aluminium, copper, zinc, lead, iron ore and commercial energy. Vedanta has operations in India, Zambia and Australia and a strong organic growth pipeline of projects. With an empowered talent pool of 30,000 employees globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information visit www.vedantaresources.com.

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