The Supreme Court has suspended all the mining activities of Obulapuram Mining Corporation (OMC), pending investigation of whether the Reddy brothers muscled into reserve forest areas via the company. Who are the Reddy brothers? How does their story speak for the general mining malaise in our country? Janardhana Reddy is the infrastructure and tourism minister in Karnataka, as well as the district minister in charge of Bellary, which covers nine Assembly constituencies and lies at the heart of the Reddys? mining empire?Bellary accounted for around 66% of the iron ore Karnataka produced last year and the state is the second largest producer of iron ore in India. Karunakara Reddy is the state revenue minister, which means he is in a position to grant favours in land disputes. Finally, Somasekhar Reddy has been mayor of the Bellary Corporation and a vice-president of the Bellary zilla panchayat. All these facts have been brought to the fore in a recent The Indian Express series titled ?The Independent Republic of the Reddys?. The broader fact emerging from the series is that while the Reddys? access to mines is limited to just four in AP on paper, they have used their political clout to create an empire that straddles Karnataka and AP. What?s critical to their profiteering is that global iron ore prices have surged 700% since the Reddys bought their first mine in 2002. However, India?s system of allocating mines remains mired in antiquity as does mapping of affected areas, notwithstanding talk of satellite geospatial records. There is also plenty of evidence to suggest that a lot of state actors, including forest officials, have played along with the Reddys, in the latter?s systemic gaming of the system.
But don?t let the Reddys play the role of red herrings, too. Consider Jharkhand, where it appears that the former CM Madhu Koda reportedly cleared as many as 41 files for iron ore mining licences in an hour. Orissa has been rocked by the scandal of crores worth of manganese ore being illegally extracted. We could go on. But the bottom line is that, notwithstanding its mineral riches, India just hasn?t worked out a system of mine allocation that meets expectations of efficiency, equity and growth. If the states? execution of responsibility has been below par, the Centre cannot claim great initiatives in capacity-building exercises. A lot of reform hopes are now vested with the new Mines and Minerals Act, which is expected to introduce transparent mechanisms such as mine auctions.
