Banks urged to scrutinise Vedanta-Mythri bauxite project amid community opposition in Odisha

By A Representative 

Civil society groups and activists from across India have issued a joint appeal to more than 30 Indian banks and financial institutions, urging them to exercise stronger environmental, social and cultural diligence before financing the Sijimali bauxite mining project in Odisha.

The appeal, addressed to major lenders including the State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Bank of Baroda, Punjab National Bank and dozens of other public and private banks, raises concerns over the bauxite mining block being developed by Vedanta Limited and Mythri Infrastructure and Mining India Private Limited. The block was allotted in 2023 to feed the Lanjigarh Alumina Refinery, and has since faced sustained opposition from Adivasi communities in Rayagada and Kalahandi districts.

The letter argues that financial institutions carry influence that extends well beyond the loans they issue, and that responsible finance today must weigh environmental, social and governance considerations alongside profit. It states that the mine would cover roughly 1,549 hectares of the Sijimali hills, including forest land that local communities depend on for grazing, firewood, food and medicinal plants. Signatories say the project also threatens the Panichida-Shuagad river and over a hundred perennial streams, and note that a study by the National Law School of India University, Bengaluru, identified vulnerable species such as the sloth bear, honey badger and Indian golden gecko living in the mine's core and buffer zones.

Beyond ecological concerns, the appeal highlights the cultural and spiritual importance of the hills to local communities, who regard them as the abode of the deity Tiji Raja. It says forest diversion and related infrastructure risk severing longstanding social and ecological ties.

The letter also questions whether legal safeguards meant to protect Scheduled Areas have been properly followed, pointing to the Forest Rights Act, the Panchayats (Extension to Scheduled Areas) Act, and the broader principle of free, prior and informed consent. It disputes official claims that Gram Sabhas held in December 2023 approved the project, saying villagers maintain that no valid meetings occurred in several villages. The signatories cite RTI documents that reportedly reveal irregularities in participation records, along with village resolutions passed in 2024 contesting the approvals, and note that related matters have since reached the Odisha High Court.

The appeal further points to recent tensions in the project area, including reports of force used during protests, injuries to residents, restrictions on movement, and criminal cases filed against community members, saying such reports call for independent scrutiny. It warns that unresolved community grievances and legal uncertainty pose real risks to financiers themselves, including reputational damage and project delays.

The letter urges banks with existing or potential exposure to seek independent verification of legal compliance, commission thorough environmental and human rights due diligence, and engage transparently with affected communities. It asks that project-linked financing proceed only once concerns around consent, environmental protection and statutory obligations have been satisfactorily resolved.

Among the signatories are prominent activists including Medha Patkar of the Narmada Bachao Andolan, Prafulla Samantara of Lok Shakti Abhiyan, and representatives of the National Alliance of People's Movements, People's Union for Civil Liberties, Indian Social Action Forum, and Jan Swasthya Abhiyan, along with academics, researchers and independent citizens from across the country. The letter closes by expressing hope for a considered response from the institutions and information on any steps they may take.