In the face of the Karnataka government's resistance to a CBI probe, the matter was referred to the Cabinet and the issue was discussed in the Prime Minister's office, Mines Minister B K Handique told PTI.
One of his concerns was whether any money from illegal mining was going to terrorists and the issue was discussed at the PMO.
Asserting that the "crackdown" on illegal mining was on the top of his agenda, Handique said that at present there were not enough legal provisions for central intervention and he would make attempts to incorporate provisions for this in the proposed Mining Act.
"There were discussions at the PMO level (on illegal mining). It would be tracked down. If money goes to terrorists, then licenses will be cancelled. It is a big thing. With NIA (National Investigation Agency) now, things are moving," he said.
"We thought that CBI will be the right approach. But we can't enforce it. We have given it to Cabinet now. We have asked them (their help) for investigation," he said.
Asked to elaborate, he said that there was a provision in the law governing NIA and the Home Ministry may be on the path of tracking where the money was going. "They have been consulting us also on this," he added.
Handique said the problem of not having adequate provisions in the law now was also discussed with Law Minister Veerappa Moily. "With Moily, we have discussed. We have discussed this with Chidambaram also. He had organised a meeting."
Handique's insistence on a probe and action in Karnataka comes against the backdrop of allegations of illegal mining by the Reddy brothers, who are ministers in the Karnataka government.
The current moves come at a time when Karnataka Governor and former Union Law Minister H S Bharadwaj has decided to refer to the Election Commission a complaint seeking disqualification of three ministers, including G Janardhana Reddy and his brother and Revenue Minister G Karunakara Reddy, from the state assembly.
Hitting out at the state government, Handique said, "Illegal mining is a dent on the industry... They (Karnataka government) don't give (permission for CBI probe). They say without CBI enquiry we can control. We (Centre) cannot take any action. It is a criminal act."
Admitting that he faced severe political pressure in his crusade against illegal mining, Handique said, "Many MPs have come to me.... (it is a) sensitive area, no doubt about it."
He said the proposed legislation would ensure that anybody can file a case against illegal mining, contrary to the provisions in the existing MMDR Act, under which only state government officials have the powers.
Karnataka is one of the mineral rich states in India with about 11 percent of the country's hematite iron ore reserves. It has over 9,000 million tonnes of iron ore resources concentrated in the Bellary-Hospet area, while the rest is found in the Chitradurga, Bagalkot and Tumkur districts.