Investment by the Universities Superannuation Scheme in a British mining company could damage an ancient forest sacred to an Indian tribe, activists say.

Survival International, a charity that supports tribal peoples, has been lobbying the main pension provider for academics to pull its investment from Vedanta for two years.

The company plans to open a bauxite mine on Niyamgiri Mountain in the state of Orissa, eastern India.

The Dongria Kondh tribe, about 8,000 of whom live in the area, have left the trees on the mountain untouched as they believe that a god inhabits the forest.

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The tribe has appealed to film director James Cameron for help, saying their plight mirrors that of the Na'vi in his blockbuster Avatar.

Lindsay Duffield, a campaigner at Survival International, said the opening of the mine would be "catastrophic" for the tribe, who relied on the hills for crops and water.

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"There will be anthropologists and academics from all subjects who have their pension money invested in this company, whether they are aware of it or not," she said.

The Church of England pulled its investment out of Vedanta, stating last month that it was "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".

However, the company insisted that Survival International's claims about the threat to the forest were wide of the mark, as trees did not grow on the bauxite deposits.

USS, the second-largest private pension scheme in the UK, had a value of ?26.8 billion in September 2009.

A USS spokeswoman refused to comment on the value of its investment in Vedanta, confirming only that the fund was "actively engaging" with the company.

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Felix Padel, author of Sacrificing People: Invasions of a Tribal Landscape and an anthropologist who studied the Kondh tribes, said the Dongria believed that a god called Niyam Raja - "King of Law" - inhabited the forest and as a result they had protected the trees.

"Preserving the forest has been at the centre of their religion since the beginning," he said.

Opposition to the mine was "pretty much universal" among the tribe, he added, and unrest about the plans was deepening.

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"It seems that within the past few days, they have come together and blocked roads into the villages and let it be known that they will defend the mountain."

Vedanta says in a statement that it "remains fully committed to pursuing its investments in a responsible manner, respecting the environment and human rights".

It adds that the mining operations "do not necessitate any resettlement of indigenous communities, nor do they cause any detrimental impact to their livelihoods".

The statement says that, contrary to Survival International's claims, "no vegetation covers bauxite deposits as the deposits are identified by flat surfaces on hill tops".

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john.morgan@tsleducation.com.