"In order to work out the extent of area correctly and perfectly, the earlier notification issued by the government of India reserving 56,690 hectares may be kept in abeyance," Chief Minister K Rosaiah wrote to the Centre today(Friday).

The issue assumes a lot of political significance as the letter comes reportedly after Rosaiah received a directive from the party high command. The issue rocked the monsoon session of the Assembly last week when opposition TDP, CPI and CPI-M cornered the state government and demanded constitution of a House Committee to probe the mining issue as former chief minister Y S Rajasekhara Reddy's son-in-law and evangelist Anil Kumar were involved in the "illegal" mining of iron ore.

The leasing of iron ore was done by the YSR government even without the Centre giving its approval, they claimed. They alleged that it was "a larger scandal than the illegal mining of iron ore in Obulapuram on the AP-Karnataka border".

Senior Congress legislators P Shankar Rao and R Damodar Reddy joined issue with the Opposition parties and demanded a thorough inquiry into the leasing of iron ore. Damodar Reddy demanded a judicial probe while Shankar Rao said mineral worth Rs 2 lakh crore was being "looted" by YSR's kin.

Sources in the Congress here said the issue was taken to the notice of the party high command which reportedly asked Rosaiah to "re-examine" the lease and "take appropriate action". Anil Kumar, however, denied he had any stake in Rakshana Steels.

On September 25, 2009, Union Ministry of Mines accorded its prior approval for reserving iron ore in 56,690 hectares in Bayyaram, Garla and Nelakondapally mandals of Khammam district for "exclusive exploration for 10 years" to Andhra Pradesh Mineral Development Corporation Limited under Section 17A(2) of the Mines and Minerals (Development and Regulation) Act, 1957.

The state issued a notification on June 30 reserving the same to APMDC. Based on the recommendations of a high-powered committee, the state government chose Rakshana Steels Limited and Consortium as APMDC's joint venture partner for supply of iron ore to the proposed integrated steel plant, including beneficiation, and issued an order on February 24, 2009.

The order also stated that iron ore deposits in Gudur mandal of Warangal district too would be supplied to Rakshana Steels.