Following is an excerpt from a report in Economic Times.

After stopping bauxite mining in Orissa the government now finds itself in a bind on the issue of rehabilitation in Lanjigarh. Corporate-backed developmental activities in the tribal region, one of the most backward places in the country, have come to a standstill following the environment ministry’s ban on mining.

The Anil Agarwal-controlled Sterlite Industries had been ordered by the Supreme Court in August 2008 to spend about 5% of its profit for development activity at Lanjigarh.

Since the environment ministry in August 2010 had barred mining, the rehabilitation package which includes about Rs 10 crore of annual development activity including the building of roads, schools and hospitals, has now been stopped.

"If disbursement from the development fund were to continue, it would imply approval of mining which would be contrary to the ministry’s order," said one person directly involved in the developmental work. On August 30, 2010, the ministry of environment and forests issued a notice barring bauxite mining in Niyamgiri on grounds of violation of environmental norms.

According to the same person quoted earlier, if the government asks Sterlite to stop developmental activity it would amount to contempt of court as it would go against the Supreme Court directive.

"Under our order we suggested rehabilitation package under which Sterlite Industries is required to deposit 5% of annual profits before tax and interest from Lanjigarh project or Rs 10 crore per annum whichever is higher," said the Supreme Court order. "The said project covers both mining and refining. The amount is required to be deposited by Sterlite Industries every year commencing from April 1, 2007. For the above reasons, we hereby grant clearance to the forest diversion proposal," read the order dated August 8, 2008.

… Among the projects which have been left uncertain include a Rs 3 crore hospital and a Rs 1.8 crore tribal school upgradation in the Lanjigarh block.

I hope the central government will consider paying this lost amount of 10 crores/year for developmental activities in that area.