New Delhi: Environment Ministry on Friday rejected Vedanta's controversial bauxite mining proposal in Niyamgiri, official sources said.

The sources in the ministry told PTI here that a decision has been taken to reject the proposal to mine bauxite in Niyamgiri hills.

The Supreme Court had recently stalled Vedanta Group's bauxite mining in Odisha till gram sabhas of Rayagada and Kalahandi districts in the state give clearance to it.

The apex court had directed the gram sabhas of the two districts to decide in three months the issues arising out of the mining project, including that of the tribals residing in the area.

The ministry had refused the next stage forest clearance to OMC and Sterlite's mining project in Niyamgiri Hills area in Lanjigarh, Kalahandi and Rayagada districts, accepting the Forest Advisory Committee's (FAC) recommendation for withdrawal of the clearance.

Efforts of Vedanta Aluminium Limited (VAL) to mine bauxite ore in Niyamgiri hills had received a setback with the 12th palli (gram) sabha also voting against mining there recently.

This is the first time an environmental referendum has been conducted on a directive by the Supreme Court to find out whether mining in Niyamgiri will tantamount to an infringement of the religious, community and individual rights of local forest-dwellers.

Niyamgiri hills are considered sacred by the local tribes and others as it is the abode of Niyamraja, their presiding deity.