Pressure was mounting on the Church of England tonight to use its power as a shareholder to stop mining company Vedanta Resources from opening a bauxite mine in a sacred part of India after it vowed to go ahead despite pleas from indigenous people.

The Church of England's Ethical Investment Advisory Group (EIAG), which advises the church on where it should and should not be investing, was briefed on Vedanta's actions by tribal representative Sitaram Kulisika and ActionAid. The EIAG now plans to meet Vedanta's management.

Meredith Alexander of ActionAid said: "We asked the Church of England to use its power as a shareholder to make sure that the mine does not go ahead."

Human rights campaigner Bianca Jagger said: "I appeal to the shareholders to hold Vedanta accountable to make sure it adheres to social, corporate and ethical responsibilities."

A spokesperson for the church, which has a £2.5m stake in Vedanta, said: "The church investors use their influence as shareholders to improve corporate behaviour. Working to a robust ethical investment policy, issues of concern are raised in a constructive and ongoing engagement, which experience has often shown to be the most successful way of bringing about change.

"For certain sensitive industries, such as mining companies, the EIAG has a three-year monitoring and engagement process. In law, the primary duty of trustees, including the Church of England's central investing bodies, is to produce a good financial return on the investments for their beneficiaries, but ethical considerations are rigorously taken into account in keeping with the church's Christian witness and values."

ActionAid organised a protest outside Vedanta's annual meeting on Monday in response to the company's plans to open a bauxite mine on Niyamgiri mountain in the state of Orissa, eastern India, in September. Activists believe the mine will have catastrophic effects on the region's ecosystem and threaten the future of the 8,000-strong Dongria Kondh tribe, which depends on the hills for its crops, water and livelihood. The area's indigenous people believe the mountain to be sacred and home of their god Niyam Raja.

After the meeting, the company urged the NGOs, which have been helping the tribal people to gain a voice, to give up their protest campaigns. "We are proceeding with the project on the basis agreed with them and we urge these NGOs to respect the decision of the legitimate authority in India, the world's largest democracy," the company said.

Jagger said that Vedanta probably believed that "every person has a price but they underestimate the bond and commitment that the Kondh people have for their land and that they aren't the type of people one can buy".

Actress Joanna Lumley, visiting Nepal after her successful campaign on behalf of the Gurkhas, said: "I urge the public to support the Dongria, who simply want to be allowed to live in peace. Unlike so many of India's rural poor, the Dongria Kondh actually live very well in the Niyamgiri hills, and it's a terrible irony that what Vedanta is proposing to do in the name of 'development' will actually destroy this completely self-sufficient people."