Vedanta Resources is pushing for alternate bauxite sources in the Indian state of Orissa after its proposed site was blocked for environmental and security reasons. A federal government report published last week condemned the way that the state government and Vedanta allegedly ran roughshod over the rights of isolated tribes in the jungle.

Their existence is threatened by forest clearances around the tribes' sacred Niyamgiri Hills to be followed by heavy bauxite mining operations to feed Vedanta's $1.7 billion aluminum processing plant in Lanjigarh in the northeastern coastal state.

The report comes as the government and several Maoist insurgency groups are edging toward peace talks that could end their decades-long confrontation in which thousands of guerrillas, security forces and civilians have been killed.

The Maoists have been fighting for a greater share of the local and state resource wealth to be passed down to the rural poor, including money from operations such as Vedanta's proposed Orissa mines.

The report and subsequent halting of Vedanta's mine project coincides with the federal government's public appeal for peace talks, as well as the Maoists' acceptance in principle for a simultaneous cease-fire. A meeting by both sides is more likely, although none has happened yet.

Campaign group Survival International called the report and the decision to halt Vedanta's plans "a stunning victory" for the Kutia and Dongaria tribes.

The hard-hitting Saxena Committee Report said that "allowing mining in the proposed mining lease area by depriving two primitive tribal groups of their rights over the proposed mining area in order to benefit a private company would shake the faith of tribal people in the laws of the land which may have serious consequences for the security and well-being of the entire country."

Federal Environment Minister Jairam Ramesh said there had been "serious violations of environment protection acts" in Orissa's Kalahandi district where Vedanta wants to mine the bauxite. "There is no emotion, no politics, no prejudice ... I have taken the decision in a purely legal approach. These laws are being violated," he said.

Vedanta's other ventures in Orissa are under separate investigation, he said.

The Saxena report said that Orissa state government officials falsified documents and concealed information from the central government to facilitate bauxite mining while the company encroached upon government and tribal lands with impunity.

Vedanta has denied it violated any laws, environmental or otherwise.

"Vedanta Resources reconfirms that there has been no regulatory violations of any kind at the Lanjigarh Alumina refinery," a company statement said. "We are not in possession of Niyamgiri mines and no mining activity will be undertaken till all approvals are in place."

The cancellation of Vedanta's proposed mine is seen as, at the least, a message to the Maoists that the government is serious about renewed peace talks. Several cease-fires have been tried in the past decade but few have accomplished any long-term results to help stabilize rural areas in India's eastern and north eastern states, called the Red Corridor by security forces.

The central government has been fighting the insurgents since the late 1960s when communist-led groups from the village of Naxalbari in West Bengal state began a low-level civil disturbance campaign.

Many Maoists, also called Naxalites, are members or former members of various legal communist splinter groups. They demand more of the wealth from the region's natural resources, especially from new mining projects, be spread among the mainly rural poor.

Since 2004 nearly 600 people have been killed each year.

But a surge in deaths last year to 1,134 prompted the government to launch Operation Green Hunt, an ongoing military offensive by 50,000 Central Reserve Police Force soldiers who are backing tens of thousands of regular policemen.

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