The sordid tale of illegal mining and consequent largescale corruption in the state has now reached its climax. Former minister and mining baron G Janardhana Reddy, a recurring character in the state’s mining saga, is now languishing in jail following his arrest by the Central Bureau of Investigation (CBI) for his alleged role in illegal mining.
Former Chief Minister B S Yeddyurappa had to step down from the helm of affairs. The Supreme Court has banned iron ore mining in Bellary, Chitradurga and Tumkur.
It all started in the 1990s when the nation opened up its mining reserves to private players as a push to liberalisation. The state government, on its part, announced a mining policy in 2000 which opened up iron ore mining to private players in the name of “export oriented development’.
Still, mining remained a relatively low profile sector. China’s big demand for iron ore turned the tables and transformed the state into a mining haven. With the global price of Indian iron ore having risen from $17 a tonne in 2000-01 to $55 a tonne in 2005-06, a mining mafia soon emerged in the state with scant respect for the law.
The mafia had set their eyes on the 9,000 million tonnes of iron ore resources (the bulk of which is magnetite) mainly concentrated in Bellary/Hospet areas besides Chitradurga, Tumkur and Bagalkote.
In March 2003, the state government de-reserved 11,620 square kms for private mining that was marked for mining/exploitation by the state. Soon, things spiralled out of control. Large swathes of forests and agricultural lands were encroached, especially in Bellary, and mined to waste by this new emerging class of mining entrepreneurs who became millionaires overnight through illegal means. A nexus between politicians-
officials-businessmen thrived and illegal mining, export of iron ore went unchecked and unabated.
As the nexus reached a nadir, in 2007, a political blame game between the then coalition partners -- BJP and JD(S) -- paved way for the Lokayukta coming into the picture to investigate into illegal mining. As the investigation unfolded, it brought into public domain the unprecedented scale of major violations, systematic corruption and underpayment of state mining royalties.
The first report submitted by the Lokayukta in 2008, dealt with issues such as the modus operandi and named the bigwigs who have helped facilitate the illegal mining horror. The report also brought to light the illegality and irregularity in grant of lease, benami transactions, the illegality in grant of stock yard licence and transportation of ore, besides the damage caused to environment.
The state government did claim having initiated reforms to curb illegal mining. But the Belekeri port incident last year was an eye opener that the reform measures had not yielded the desired results. Forest officials seized eight lakh metric tonne of iron ore being illegally transported. It was obvious that the ore had been mined illegally.
CEC slams govt
The issue also reached the Supreme Court with the Samaj Parivarthan Samudaya, an NGO, filing a petition regarding the alleged illegal mining and other related activities in forest areas. The forest bench of the Supreme Court referred the matter to the Central Empowered Committee (CEC).
The CEC after several site visits slammed the state government for allowing illegal mining and not acting on the recommendations of the Lokayukta. The panel recommended the revocation of mining leases and environmental clearances granted to the indicted mining companies.
An observation by the CEC in its report sums it all. “After the Lokayukta filed a report, practically for two and a half years no effective action has been taken by the state of Karnataka ......It has taken more than two and half years for even seeking legal opinion.... This is simply not acceptable and indicates the extent of the rot and the hold vested interest have on the government”, the CEC stated in its report submitted in January this year.
It further states that at a conservative rate of ~5,000 per tonne, the value of illegally exported iron ore from Karnataka amounted to ~15,245 crore between 2003-2004 and 2009-10.
Beginning of the end?
However, the last word in the state’s mining saga was yet to come. In a damning second and final report on illegal mining, the Lokayukta put the loss to the exchequer at ~16,085 crore between 2006 and 2010 and recommended action “as per law” against the then chief minister B S Yeddyurappa and three of his cabinet colleagues - the infamous Reddy brothers, Janardhana and Karunakara Reddy, and their close aide B Sriramulu.
Also named were about 100 companies and 787 public officials. The political minefield that followed cost Yeddyurappa his job.
Others too may soon fall into the net. The government-appointed committee headed by Additional Chief Secretary K Jairaj to study the Lokayukta report has been given two months time to submit its report. The government has said it would go by the committee’s advice. With the October 16 deadline for the committee not too far away, the beginning of the end to the state’s mining saga might just have begun.
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