Bhubaneswar, Jan 11 (IANS): An anti-displacement activist Saturday hailed the central government's decision to reject Vedanta's plan to mine Odisha's Niyamgiri hills for bauxite.

"We are happy that the central government honoured the Supreme Court decision and the verdict of the local people," Prafulla Samantara, one of the petitioners against the Vedanta project, told IANS.

"Now, the government should order dismantling of the Vedanta plant in the area as mining has been rejected," he said.

Vedanta has set up a one million tonne per annum alumina refinery at Lanjigarh in Kalahandi district, about 600 km from here. However, it could never operate the plant at full capacity due to shortage of bauxite, the key raw material used to produce alumina.

Vedanta had entered into an arrangement with the state government for supply of bauxite through a state agency from nearby Niyamgiri hills, but the move was challenged by anti-displacement groups, as also Samantara.

The Supreme Court April 18 last year asked the state to go to gram sabhas (village meetings) to understand the religious and cultural aspects of tribals in the region.

Residents of 12 villages whose opinion were sought had unanimously voted against mining in the hills. The state government had sent their opinion to the central government.

Based on the opinion of the villagers, the central government rejected the mining plan, a senior state official of the state mining department said.

"The state government has received a letter from the Inspector general of forests of the union ministry of forest and environments H.C.Chaudhary in this regard," he said.

"I am directed to reiterate the decision of the central government to reject stage II approval under the Forest (Conservation) Act, 1980 for diversion of 660.749 hectres of forest land in favour of Orissa Mining Corporation for mining of bauxite ore in Lanjigarh Bauxite reserve in Kalahandi and Rayagada district," Chaudhary stated in the Jan 8 letter, a copy of which is in possession of IANS.

The Niyamgiri Hills in Rayagada district, about 600 km from Bhubaneswar, are home to more than 8,000 people of the Dongria Kondh tribe, who worship the mountain-top as the seat of their god. The bauxite under the hillslopes, which the Britain-listed, Anil Agarwal-owned firm Vedanta proposed to mine, is also good at holding water and feeding perennial streams, making the hills lush with vegetation.