A Sponge iron factory by Kundil Sponge Iron Limited had been started on in-principle clearance from the Karnataka Udyog Mitra in 2005. The groups proposal to set up sponge-iron and ferro alloy units and power plants at Londa was among the 23 projects cleared by the State-level single window agency and approved by the Karnataka Udyog Mitra and the Directorate of Industries and Commerce .
Villagers of surrounding areas alleged that the factory has violating pollution norms. The residents of Londa attacked Kundil Sponge Iron Ltd and demanded its closure for being a highly polluting factory. People have also organized rallies, agitations, submitted memorandums and filed cases in the court. It is said that a court has ordered for the closure of Kundil. Hence the re-opening of the factory should be a contempt of court order. The Karnataka State Pollution Control Board (KSPCB) has issued a show-cause notice to the plant following complaints from the people in 2005 [2, 3, 4, 5] . The factory was closed following a Public Interest Litigation (PIL) by Khanapur residents . The Sub-Divisional Magistrate and Assistant Commissioner, Vijaymahantesh B.D., on Friday issued an order for closure of Kundil Sponge Iron Limited (KSIL) in Londa  Also, the plant is located near the reserve forest which is an ecologically sensitive area. It lies on the boundary of a proposed biosphere reserve (the Sahyadri Biosphere Reserve proposal, made by the Goa and Karnataka forest departments) and a wildlife sanctuary. The project site lies virtually on the crestline of the Western Ghats (between the West Coast and the adjoining hilly regions) which forms the main watershed from which all east- and west-flowing rivers originate .