Indian court deals new blow to Vedanta India's Supreme Court dealt another blow to Vedanta Resources on Thursday, saying that bauxite could not be mined from eastern India's pristine Niyamgiri Hills without permission from an animist tribe, which worships the hills as the home of their local deity. In its ruling, the Supreme Court said the London-listed mining company, founded by self-made billionaire Anil Agarwal, had failed to adequately consult the indigenous Dongria Kondh tribe about how the proposed mine would affect the home of their deity, Niyam-Raja, on a sacred peak 10km away. In 2010, India's environment ministry, then under activist minister Jairam Ramesh, had rejected the application to mine 150m tonnes of bauxite from the Niyamgiri Hills, but Vedanta's partner, the Orissa State Mining Corporation, had appealed to the Supreme Court to overrule the ministry's decision. Instead, the court ordered authorities in the eastern state of Orissa to organise meetings of local village councils in the Niyamgiri Hills so that members of the Dongria Kondh could decide whether the mine threatened their religious practices, environment and livelihoods. The court said the meetings should take place within three months, and be observed by a judge to ensure no outside interference. "Their right to worship the deity Niyam-Raja has to be protected and preserved," the verdict said. Ritwick Dutta, an environmental lawyer involved in the case, said the ruling vindicates environmental activists, who accused Vedanta of trampling over the rights of the nature-worshipping Dongria Kondh tribe, and flouting complex rules intended to protect their interests. "The company throughout said that all the required consultations were in place and had followed all the laws," Mr Dutta said. So to be told to go back and take permission from the local community is a defeat so far as they are concerned. Vedanta declined to comment. The verdict comes just weeks after Standard & Poor's, the rating agency, said that it was putting Vedanta on negative ratings watch, as the company struggles to tie up more than $2.1bn to refinance debt coming due over the next two months. However, a mining industry expert said the judgment opens a path for Vedanta to obtain mining clearance, if it can win the approval of local people. The court did squash the environment ministry's 2010 ruling, and ordered the ministry to make a final decision within two months of the village councils" meeting to decide their stand. The Supreme Court judgment is the latest twist of a protracted international battle over plans to mine a rich seam of high-quality bauxite in Orissa, as Vedanta seeks to become Asia's largest, integrated aluminium producer. Vedanta has already ploughed $1bn into the first phase of its Lanjigarh alumina refinery, another $1bn towards a $2.2bn, 5m ton expansion of the refinery, and $4.3bn towards a 1.7m ton aluminum smelter and 1200 megawatt power plant. But the entire project was predicated on sourcing the bauxite in the Niyamgiri Hills. The Lanjigarh refinery has been idle since December, due to the company's inability to find sufficient alternative sources of the mineral. Shares in Vedanta were flat at £10.87 in mid-afternoon trading.