UK government criticises Vedanta on bauxite mine

LONDON, Oct 12 (Reuters) - A British government agency said mining group Vedanta (VED.L) failed to consult enough with an indigenous ethnic group about a proposed bauxite mine in India.

The Dongria Kondh people would be directly impacted by the mine in Orissa in eastern India being built by London-listed Vedanta, the agency said on Monday, upholding a complaint by pressure group Survival International.

"Vedanta did not respect the rights and freedoms of the Dongria Kondh consistent with India's commitments under various international human rights instruments," a statement said.

The agency is the UK arm charged with promoting guidelines for multinational companies adopted by the Organisation for Economic Co-operation and Development (OECD).

Vedanta is a member of the UK blue chip FTSE-100 index, but has no operations in Britain, producing metals such as zinc, copper and iron ore in India, Zambia and Australia.

Vedanta declined immediate comment on the report, but has previously rejected criticism that the area to be mined is sacred ground to the Dongria Kondh people.

India's Supreme Court has allowed Vedanta to proceed with its plans to mine bauxite, a raw material to make aluminium, and a company official told Reuters in July that the local people were happy with the plans. [ID:nDEL283638]

Survival International said it hoped that the ruling would lead to a change of position by Vedanta.

"We're very pleased that the UK government has finally taken a stand on ... one of the most notorious mining projects in the world," Survival International Director Stephen Corry said. (Reporting by Eric Onstad; Editing by David Cowell)