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News updated at 9:04 PM IST

Report uncovers govt-miners nexus

Last updated: 29 July, 2011
Bangalore, July 28, DHNS: 1:43 IST

The explosive report of Lokayukta that has put Chief Minister B S Yeddyurappa in a spot has also brought in sharp focus the State governments inability to curb rampant illegal mining over the past several years.

The unfair practice has resulted in illegal shipping of 2.98 crore metric tonnes of iron ore valued at whopping Rs 12,228 crore between 2006 and 2010.

The report, based on the investigation done by Lokayukta team headed by U V Singh, revealed how the controversial Reddy brothers and their associate Sriramulu indulged in looting the natural resources of the State.

The report, a copy of which was made available to the media by Lokayukta office under Right to Information Act (RTI) on Thursday, also exposed the fact that the ban could not check the export of large quantity of iron ore. About 17.58 lakh metric tonnes of iron ore was illegally exported from the State after July 28, 2010 when the government issued the ban order.

The 464-page report, which comprises observations and recommendations of Lokayukta justice Santosh Hegde, has 32 chapters.

Separate chapters

There are separate chapters on dubious financial transactions, involving Chief Minister Yeddyurappa and his family members, the Obalapuram Mining Company (OMC) owned by Tourism Minister Janardhan Reddy, Matha Minerals of Housing Minister V Somanna, devious ways in which goons in Bellary used to mine and export iron ore, iron ore theft at Belekeri port and collapse of administration in Bellary.

According to the report, the highest quantity of illegal export has been recorded in 2009-10 when 1.27 crore metric tonnes of iron ore mined in the State was exported.


The investigative team, however, has not been able to trace the destination of 32.44 lakh metric tonnes of iron ore illegally exported during the four years. Iron ore exported from Goa ports has not been computed.

Janardhan Reddy-owned OMC exported 71.61 lakh metric tonnes of iron ore from Karnataka though the company does not have any mining lease in the State.

It has mining leases in neighbouring Andhra Pradesh. Ironically, the company exported only 2.17 lakh metric tonnes from its lease area in Andhra Pradesh between 2006 and 2010.

“The investigating team has reported that these exports details require further investigation. It is also stated that the CBI is dealing with the matter in this regard and the said agency may take note of it,” says the report.

The team has found illegal export on part of OMC by comparing the shipping bills at the Customs office and the permit data of the State Mines and Geology and Forest departments. Reddy has been claiming all along that he was not doing mining in the State.

Similarly, another Andhra Pradesh company Y Mahabaleshwara has illegally exported 7.05 lakh metric tonnes of iron ore from the State.

As many as 83 exports of iron ore with a quantity of 17.58 lakh metric tonnes have been found in various ports after the government banned the export in July 2010. Maximum exports were done from Krishnapatnam and Belekeri ports which are administered and managed by private companies.

The report has details of all 83 exports. “This specific matter requires further investigation for finding out illegalities and persons responsible,” the report stated.
A large quantity of iron ore was transported to ports from lease areas without any permit or with forged permit between 2009 and 2010.

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