The Church of England has sold all its shares worth £3.8 million in British mining company, Vedanta Resources Plc due to concerns over the miners human rights record in Orissa.

The parish church of St. Lawrence at Bourton-on-the-Water, Gloucestershire, England.

London-based based Vedanta Resources, a FTSE 100 company, runs an alumina refinery in Lanjigarh and plans to mine bauxite in the Niyamgiri hills in Orissa, which is a sacred hill to the Kondh tribe having lived there in harmony for generations.

Activists allege that the bauxite mine to be operated by Vedanta's Indian subsidiary Sterlite Industries, will destroy a large part of the Niyamgiri Mountain and its environs and displace the Kondh tribe from their habitat.

Concerned over the allegations, the Church of England said yesterday that the Church Commissioners and the Church of England Pensions Board have sold their shares in Vedanta on the advice of the Church's Ethical Investment Advisory Group (EIAG).

As a result, none of the three national investing bodies of the Church of England hold shares in the company.

Following demonstrations against Vedanta outside its headquarters in London in July by activists during the company's annual general meeting (See: Activists protest Vedanta's Orissa project during London AGM), the Church of England had sent a representative in November to look into the claims of violation and complete disregard of the community's will by the company.

The protest in London was spearheaded by rock star Mick Jagger's ex wife Bianca Jagger, a noted social and human rights advocate, who was supported by UK-based campaign groups, including ActionAid and Survival International.

Jagger had called on investors including the Church of England and a few councils to rethink on their association with Vedanta.

The activists had also written to governments around the world as well as local financial companies like Dundee-based Alliance Trust, Standard Life, Barclays Bank, Abbey National and HSBC, asking them to divest their stock in Vedanta.

They had also asked universities of Edinburgh, Glasgow, St Andrews and Aberdeen, which collectively hold around £18 million worth of stock in Vedanta, to sell the shares of the company.

Scottish firm, Martin Currie Investment Management, under pressure from green group Survival International, sold all its shares worth £2.3 million in Vedanta last August.

EIAG chairman, John Reynolds, said, ''I am a passionate advocate for engagement with companies when we have ethical concerns. We have an excellent track record of getting our concerns heard and acted upon by the companies in which the Church investing bodies hold shares.

''We are grateful to Vedanta's senior management for making themselves available to meet us on a number of occasions. However, after six months of engagement, we are not satisfied that Vedanta has shown, or is likely in future to show, the level of respect for human rights and local communities that we expect of companies in whom the Church investing bodies hold shares.''

''In these circumstances the Ethical Investment Advisory Group advised that it would be inconsistent with the Church investing bodies' joint ethical investment policy for the investing bodies to remain invested,'' he concluded.

Vedanta said in a release, "We are disappointed by the Church of England's decision to sell their holding in Vedanta. Vedanta remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights. We work with a number of NGOs and with the authorities in India, the world's largest democracy, ensuring all our projects are conducted in compliance with the law and international best practice. We will continue to engage closely with the Church of England to address the concerns they have raised.''

In February 2009, the $300-billion Norway's Government Pension Fund, the county's sovereign wealth fund, blacklisted and divested its holdings in the miner on the recommendation of its council on ethics, which was set up to advise the fund against investing in companies involved in human rights abuses, environmental damage, or the production of certain weapons and nuclear arms. (See: Norway blacklists 'unethical' companies) 

Vedanta had said last year that the government of Orissa has supported the project and was even cleared by the court in India. It argued that it had exhaustively assessed any environmental and social impact before embarking on this project.

However the Indian government has still to give the go-ahead for this project.