NEW DELHI, India (AP) – Amnesty International warned Tuesday that a British owner’s proposed mine would harm indigenous people in eastern India who already suffer from polluted water and air because of the company’s nearby refinery.

The Vedanta Resources projects in the Lanjigarh area of eastern Orissa state have drawn increasing criticism. Last week, two Church of England funding bodies sold their shares in the company because of objections to its Lanjigarh operations.

In a statement e-mailed to The Associated Press, Vedanta said the proposed bauxite mine had the required environmental clearances and denied allegations of groundwater pollution from its alumina refinery.

It said Amnesty’s allegations “directly challenged the credibility and robustness” of India’s regulations, and the Amnesty report was based on outdated information.

“Vedanta has the highest respect for human rights,” it said.

Bauxite is used for producing alumina – a material used to make aluminum.

Amnesty’s report says the planned mine in the Niyamgiri Hills near Lanjigarh threatens the existence of the Dongria Kondh, an 8,000-strong tribe of indigenous people who consider the surrounding mineral-rich hills sacred.

Amnesty said the projects were devastating to the Dongria Kondh and accused the local government of not informing the community of the health impacts.

“People are living in the shadow of a massive refinery, breathing polluted air and afraid to drink from and bathe in a river that is one of the main sources of water in the region,” Ramesh Gopalakrishnan, the London-based group’s researcher on South Asia, said in a statement.

India’s Supreme Court has instructed the federal environment ministry to give Vedanta subsidiaries a stage-one clearance – in principle a mining license – but final approval is pending. The project partners are Vedanta subsidiary Sterlite India Ltd. and state-owned Orissa Mining Corporation.

India’s Ministry of Environment and Forests sent a team to assess the mine’s environmental impact, but no report has been prepared yet and ministry officials were not available for comment Tuesday.

Last week, the Church of England’s Ethical Investment Advisory Group expressed concerns about the projects, leading the church funds to sell $6.7 million of Vedanta shares.

Earlier this week, London-based tribal rights group Survival International called on “Avatar” director James Cameron to help the Dongria Kondh, comparing their plight to that of the Na’avi fighting to protect the forest moon of Pandora in his Oscar-nominated, blockbuster film.