UK-based metals major came under more pressure as it was revealed on Tuesday that one of its group companies, Balco, is a supplier of refined aluminum to the Indian defence sector.
This information is now being used by human rights campaigners to urge investors like the Church of England to divest from to keep in line with the church's policy of not investing in companies that are involved in any way in armament production.
Vedanta Resources was already under immense pressure from human rights and environmental groups to abandon its plans to mine at the Niyamgiri mountains in Orissa for bauxite (to extract aluminium). The dig site is considered a sacred ground by the local Dongria Kondh community and has attracted support from conservationists from across the world.
Now The Guardian has reported that a group company, Balco, is a supplier of refined aluminium to the Indian nuclear programme, which comes as a direct conflict to the investment policies of religious bodies like the Church of England.
Meredith Alexander, head of trade and corporates at ActionAid and who was quoted in this report, said: "Vedanta's commitment to sustainable development becomes ever more laughable.
The news that Vedanta provides raw materials for weapons systems is outrageous.
This is just another reason why investors should take a hard look at their holdings in Vedanta. The Church of England, for example, state that they will not invest in defence companies.
Vedanta's involvement in missile production surely makes their investment even more controversial."
An unnamed Vedanta spokesperson was quoted in the report as defending the company by stating that his company was not involved in making weapons but supplying basic raw material, which can be used by many industries and not just the armament industry.
Last week, following protests by activists outside the venue where Vedanta held the annual general meeting of its shareholders, the Church of England agreed to review its investment in the company, which to date is valued at £2.5 million.
The church's Ethical Investment Advisory Group is now planning to meet the management of Vedanta to assess its status and to see if its investment contradicts its stated policies.
Apart from the armament business, the church also refrains from any investment in businesses that are involved in pornography, tobacco or breweries (alcohol). The EIAG is not expected to meet the Vedanta management before September this year.
Balco came to be owned by Sterlite Industries in 2001 (which is in turn owned by Vedanta Resources) and supplies aluminium alloys for India's key missile programmes, including the Agni, Prithvi and the Akaash.