Ban halts development at Lanjigarh

Economic Times, Dec 13, 2010
MUMBAI: 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.

A spokesperson for Vedanta Resources , the parent company for Sterlite Industries, declined to comment on the issue. Mails sent to the envioronment ministry also went unanswered.

For tribals of the area, the halt in developmental activity has compounded their woes. "We have wasted our time for nothing. Now, we want basic facilities like education and healthcare first. Industrial development can come later," said Jitu Jakasika, a Dongriya Kondh tribal, one of the new few people to have studied.

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.

Bauxite mining at Niyamgiri had attracted global attention after reports that the company had allegedly not consulted tribals before embarking on mining, thereby prompting the local population to mount stiff opposition to the project. International NGOs highlighted that mining would destroy sacred tribal areas and also impact the environment.

The controversy finally led the government to issue its notification to stop mining activity.