Illegal mining of iron ore in Karnataka is now a hotly debated issue across the political and administrative circles in the country, but there is plenty of history to it. The iron ore-rich Bellary belt of Karnataka has been a blessing as well as a curse for the state.
Mining is one of the major industries of the state. Gold along with iron ore are the main minerals of Karnataka. While India has 23.52 billion tonne of iron ore reserves, Karnataka’s reserves of 9.3 billion tonne contribute 38% of the total iron ore deposits in the country.
Iron ore reserves found in Bellary, Hospet and Sandur regions in Karnataka, have a mining history of over 100 years. Till a decade ago, the mining companies were struggling with small profits due to low iron ore price both in domestic and international markets.
The iron ore prices skyrocketed to R4,500-5,000 per tonne in 2005-06 from R300 per tonne in 2002-03 when China started shipping huge amount of the mineral from India ahead of its preparations for Beijing Olympics. The sudden demand from China had driven many companies and individuals to illegally mine and transport the iron ore in Bellary and surrounding areas. Lucrative returns in iron ore mining in the past few years led to growth of a new class of entrepreneurs who indulged in illegal mining without licence, mining in reserved forest area, and also mining in excess of their licencsed capacity.
This was the period when the Reddy brothers ? G Karunakara Reddy, G Janardhana Reddy and their aide B Sriramulu, emerged as mining magnates of the country. Although their registered Obalapuram Mining Company has been functioning in the neighbouring Andhra Pradesh, the Reddy family had virtually controlled their native Bellary region with their political power. Their grip over Bellary tightened when they got three ministerial posts when the BJP formed its government in 2008 in the state.
Not only Reddy brothers, several other bigwigs from various parties encashed the opportunity. The enormous money flow has not only brought luxurious cars and bungalows to the once poor, dusty town of Bellary, but it has also prompted many miners to fly in private charters.
Of the 50-70 private jets in India, as many as eight private aircraft, including two Bell helocopters, are owned by mine owners in Bellary.
Following frequent allegations, the Karnataka Lokayukta was given the task to probe the large-scale illegal mining and transportation of iron ore from forest areas in March 2007. The first report on illegal mining submitted by justice Santosh N Hegde to the government in December 2008, had indicted former chief minister N Dharam Singh and 11 government servants including one IPS and 6 IAS officials in the illegal mining scam. The report had recommended stringent action against the accused and suggested tightening of rules while granting licenses and transportation permits. The Centre, however, appointed a three-member panel of IAS officers to go through the report but no action has been taken so far.
Meanwhile in July 2010, the state government had imposed ban on iron ore exports. However the ban has been lifted by the Supreme Court after hearing the petitions filed by the mining companies in April this year, but the export has not yet started effectively as the state government is yet to put in place the infrastructure to regulate trade.