Stop illegal mining in Karnatakas forests by mining mafia

Last Update: Friday, March 14, 2011 at 23:20 hrs Indian Std. Time
http://www.petitiononline.com/mfmining/
Video Link:
http://indiatoday.intoday.in/site/Video/93433/42/karnataka-illegal-mining-continues-unabated.html
Govt let Reddy bros have the last laugh in 15 cases Times of India Friday, July 16, 2010
http://timesofindia.indiatimes.com/city/bangalore/Govt-let-Reddy-bros-have-the-last-laugh-in-15-cases/articleshow/6174661.cms
http://www.thepetitionsite.com/1/implement-supreme-court-directives-on-police-reforms/
After assuming power, the BJP government has withdrawn 233 cases, including four against tourism minister G Janardhan Reddy and 11 against health minister B Sriramulu.

Besides the Bellary miners, the government has withdrawn cases against its MLAs and Sangh Parivar functionaries. Some of them are K G Bopaiah, C T Ravi, K S Eshwarappa, Sunil Kumar, ABVP state secretary N Ravi Kumar and Hindu Jagaran Vedike state convener Jagadish Karanth. The cases have been withdrawn from prosecution between July 1, 2008 and June 20, 2010. Interestingly, most have been withdrawn against the wishes of the DGP, prosecution department and the law department. "The cases have been withdrawn as per discretionary powers vested with the government," the then home minister of Karnataka said (on 2010).

In the cases related to Reddy and Sriramulu, the DGP, prosecution department and the law department had opposed the withdrawal, but in vain.

Focus back on Reddys as Karnataka crisis rages on - CNN-IBN July 13, 2010
Focus back on Reddys as K'taka crisis rages on - Politics News ...
http://ibnlive.in.com/news/illegal-mining-yeddyurappa-rules-out-cbi-probe/126580-37-64.html?from=tn
Once struggling entrepreneurs in Bellary district, the Reddy brothers have a lot to thank Congress president Sonia Gandhi and China's hunger for steel for the meteoric rise in their political and financial clout in just over 10 years.

The brothers - Janardhana is tourism minister, elder Karunakara holds the revenue portfolio and the third sibling Somashekara is a legislator. Their finances started soaring in 2002 when Janardhana Reddy turned to iron ore mining, not in Bellary but in Obulapuram in adjoining Andhra Pradesh.

With China devouring steel as it built stadiums, infrastructure and other facilities for the 2008 Beijing Olympics, and the global economy in a boom phase, iron ore prices skyrocketed. So did the riches of the Reddy brothers. They switched over from cycle/scooter to luxury cars and choppers.

Illegal mining stalls Karnataka assembly for third day - - Wednesday, July 14, 2010
http://www.thaindian.com/newsportal/politics/illegal-mining-stalls-karnataka-assembly-for-third-day_100395750.html
The Reddy brothers, Tourism Minister G. Janardhana Reddy, his elder brother and Revenue Minister G. Karunakara Reddy, and younger brother and assembly member G. Somashekara Reddy, are accused of large-scale illegal mining in Bellary as well as neighbouring Andhra Pradesh.

The brothers own the Obulapuram Mining Company.

Between 2003 to July 2010, over 30 million tonnes of iron ore has been illegally mined and exported from Karnataka causing a huge revenue loss. Congress and JD-S claim that the illegal mining scam is worth around Rs.60,000 crore (Rs.600 billion).

Is blurred border a cover for illegal mining? Times of India  July 16, 2010
http://timesofindia.indiatimes.com/City/Bangalore/Is-blurred-border-a-cover-for-illegal-mining/articleshow/6174653.cms
Unsettled border issue of Bellary fosters illegal mining
Borders shifted

Karnataka Forest Department (KFD)
KFD had to guard against illegal mining in its reserve forest area
KFD is itself being blamed for being hand-in-glove with the miners
Some KFD officials were in cahoots with those who had changed the land records
KFD hasn't stopped illegal mining in disputed areas by claiming border hasn't been earmarked
KFD is/was allowing unstopped illegal mining
KFD is/was a mute spectator to the continued illegal mining in the disputed areas

Land records
have been changed / fudged
do not match the topo sheets (of 1890 & 1975) used for survey

Topo sheets
of 1890, 1924 and 1975 available
dispute between Karnataka Forest Department (KFD) and SOI (Survey of India)
of  KFD do not match with SOI's
KFD wants to use 1890's
SOI's  wants to use 1975's
do not match (KFD#SOI)

Joint survey
of Karnataka, Andhra Pradesh and Survey of India (SOI) team
Lokayukta was not made a party
could not come to a conclusion on the border issue
the border issue at Obulapuram, Tumati and surrounding areas could not be ascertained

Lokayukta
Has original land records as well as topo sheets
Can definitely help to mark out a proper boundary

Survey did not take into account three villages in the area - Malapanagudi, Tumati and Siddapura. While mining lease permits were issued for Antaragangammana Konda in Andhra Pradesh, mining was carried out in these three areas.

Forest clearance
by the forest dept for mining in/at Tumati and surrounding areas had lapsed
is deemed to have been cancelled if the border is altered or border point damaged during mining (as per the clause)

Murky goings on in Karnataka make India sit up (Letter From Bangalore) - Wednesday, July 14, 2010
http://www.thaindian.com/newsportal/politics/murky-goings-on-in-karnataka-make-india-sit-up-letter-from-bangalore_100395622.html
llegal mining
has been on for years in the Karnataka state
by 08 companies in Bellary district
Union Ministry of Mines' task force (officials of Indian Bureau of mines) recommended suspension of mining licenses of 06 companies to the Karnataka government
acquired a huge dimension early this decade as demand for steel went up across the world, particularly in China as it prepared to host the Olympic games
ramifications are not only restricted to Karnataka, but spread across states
issue has national and international bearings and can't be handled by the local police

Mining barons
are prominent in three major political parties dominating the Karnataka scene now - the BJP, Congress and Janata Dal-Secular (JD-S).
of Congress and JD-S mine owners kept a low profile
of BJP have been in the news since 2006 for all the wrong reasons

03 Reddy Brothers
eldest G. Karunakara Reddy (Revenue Minister)
most vocal G. Janardhana Reddy (Tourism Minister)
youngest G. Somashekara Reddy an assembly member and president of the Karnataka Milk Federation (KMF)
hail from neighbouring Andhra Pradesh
have made iron-ore rich Bellary, about 300 km from Bangalore bordering Andhra Pradesh, their political base
own the Obulapuram Mining Company (OMC) which has most of mines in Andhra Pradesh
are facing grave charges of erasing boundary marks between the two states for their alleged illegal mining

Janardhana Reddy
almost unseated BJP's first Chief Minister B.S. Yeddyurappa in 2009 through a rebellion but agreed to let him stay after a compromise brokered by their 'thayi' (mom/mother), as they fondly / affectionately call senior BJP leader Sushma Swaraj.

Belekeri
is a minor port in west coast Uttara Kannada district, about 500 km from Bangalore
it is from here the Karnataka Lok Ayukta (ombudsman) Hegde found that 5,00,000 tonnes of around 8,00,000 tonnes of illegally mined ore it had seized had been exported early this year using forged documents

Bellary
is one of the most backward districts in the Karnataka state
has been the refrain of all governments that have ruled Karnakata since independence
posting is still considered a punishment, particularly by people in south Karnataka
because of the intense heat, dust, perennial water shortage, lack of good schools and colleges
belt in north Karnataka is rich in non-renewable mineral resources

Congress president Sonia Gandhi decided to contest from this party bastion in 1999 Lok Sabha polls. BJP fielded Sushma Swaraj. Reddy brothers had joined the BJP just ahead of the 1999 Lok Sabha polls and worked for Sushma Swaraj.

Karnataka Lok Ayukta (ombudsman) Hegde a retired Supreme Court judge
resigned on June 23, 2010 because of the illegal export and attempt by Ports Minister J. Krishna Palemar to have the deputy conservator of forests (DCF) R. Gokul suspended
his resignation stalled Gokul's suspension. (The officer (Gokul) had seized the ore on the orders of Hegde.)
who withdrew his resignation has submitted a report on illegal mining in the state in 2009
is unhappy that the Karnataka government has not acted on it and illegal mining and export of iron continues

Minister's secret mission - Deccan Herald Bangalore, July 15, 2010
http://www.deccanherald.com/content/81625/ministers-secret-mission.html
Health Minister Sriramulu (friend of Reddy brothers)
Went on a top secret surprise mission / visit to Bellary Jail at around 2 PM on Tuesday, July 13, 2010
had not taken any of the officials of his department with him
had some discussions in detail with a few notorious rowdy-sheeters at the Central Prisons Parappana Agrahara
and four other MLAs from Bellary district met three rowdy-sheeters who are charged with serious offences like murder(s)-Bettanagere Manja from Nelamangala, Chandregouda from Bellary district and Katte Naga
reportedly spent much time in those places where most of the notorious rowdy-sheeters have been kept
called some of the rowdies from in and around Bellary and talked to them in a separate room
spoke to Chandregouda for more than 10 minutes
spent more than half an hour with Bettanagere Manja
spent nearly three hours in the prisons, spent more time for his talks with rowdies instead of asking for medical facilities
the Prisons officials were sent out of the room when the rowdies entered for 'talks'

Fresh Probe Of Reddys - Tehelka - India's Independent Weekly News ...
Fresh Probe Of Reddys From Tehelka Magazine, Vol 7, Issue 25, Dated June 26, 2010
http://www.tehelka.com/story_main45.asp?filename=Ne260610fresh_probe.asp
Kondaiah, a former Lok Sabha member from Bellary, has been highlighting the misdeeds of the Reddy brothers, some of which were reported in the April 3, 2010, issue of TEHELKA.
Kondaiah:
In 2003-04, the income of the Reddy brothers was below the taxable limit
From then on, they say they have accumulated assets worth Rs 50,000 crore
Where did this wealth come from?
says G Janardhana Reddy, G Karunakara Reddy and B Sriramulu should be prosecuted for illegal mining in Bellary and Chitradurga districts either directly or indirectly, encroaching forest land beyond permissible mining areas by use of fake permits, non-payment of royalty, influencing cabinet decisions about illegal transportation of iron ore, creating benami entities for illegal mining business to make huge pecuniary gain for themselves, and causing huge loss to the exchequer.
says they must be disqualified as MLAs and ministers for having licences and leases with the governments of Karnataka and Andhra Pradesh through companies that are directly or indirectly under their control.

The laudable object of Article 191 of the Constitution and Section 9A of the Representation of the People Act is to eliminate or reduce the risk of conflict of duty and self-interest among the members of the legislature. This is also a salutary principle of democratic governance that holders of high public office are required to take decisions to serve public interest without intending to have pecuniary gain either for themselves or for others. They are expected to discharge their functions as public servants in such a way that it inspires public confidence.

Therefore, provisions have been enacted in the Constitution through Article 191 and the Section 9A of the Representation of the People Act RP Act to disqualify members who show utter disregard to the provisions of the Constitution and the law.

BSY mum on Ramesh's letter on mining Deccan Herald Saturday, July 18, 2010
http://www.deccanherald.com/content/82053/bsy-mum-rameshs-letter-mining.html
Karnataka Chief Minister B S Yeddyurappa preferred silence on a critical letter from Jairam Ramesh in which the Environment Minister had asked him to take action against the ongoing illegal mining in Sandur forest.

On July 3, Ramesh wrote to the chief minister about the illegal mining at Sandur, which was continuing unabated notwithstanding a May 10 forest advisory committee resolution that clearly and explicitly directed that such mining must be stopped.

"Since the forest advisory committee (FAC) is a statutory committee of the government, violation of its orders is a matter of serious concern," Ramesh said.

The FAC had recommended action against three companies - SB Minerals, Trident Minerals and Veeyam Minerals (mining lease 2010) - and instructed the State to undertake a series of corrective actions. Ramesh wanted an answer from the state by July 10.

The chief minister has neither responded to the second and more critical letter from Ramesh, nor elaborated on what the State did on the FAC recommendations, which included survey and demarcation of the area under mining lease (ML) 2010 and setting up heavy pillars on the boundary.

All the mines in the area, both contiguous to ML 2010 and otherwise in the radius of one km of ML 2010, were instructed to erect numbered heavy boundary pillars.

Safety zone
A mandatory safety zone of 7.5 metre width all around the inner side of the boundary of these mining lease areas was recommended. The FAC favoured planting of saplings to make the ML borders a green boundary.

The FAC also recommended stopping mining activities of the three companies (SB: ML 2550, Trident: ML 2313 and Veeyam: ML 988) till the areas were demarcated and the minerals transported. It also asked the state to identify the culprits behind this irregularity.

On May 10, the State was given a time line of one month to complete the survey and erect the pillars. The saplings  were to be planted during the rainy season.

High drama continues in Karnataka, Cong calls CM 'coward' 16 Jul 2010, 1249 hrs IST
http://www.timesnow.tv/Karnataka-Congress-calls-CM-coward/articleshow/4349703.cms 
The Karnataka CM
had been denying saying everything is OK in this regime
has now admitted that 1,05,00,000 metric tonnes has been illegally mined and exported in the last two years  in his regime, from different ports like Goa, Vizag, Belekeri, Karwar and Mangalore (as per timesnowtv report)

Mining Controversy Rocks Karnataka 13 Jul 2010
http://www.businessworld.in/bw/2010_07_13_Mining_Controversy_Rocks_Karnataka.html Chief Minister Yeddyurappa
Over three crore iron ore tons worth over Rs 12,000 crore was illegally shifted out of the country since 2003
In 2009-10 alone, about 71 lakh tons of iron ore were illegally shipped out of Karnataka

Largescale illegal mining in Karnataka: Chief minister Wednesday, June 30, 2010 9:43:44 PM
http://www.thaindian.com/newsportal/politics/largescale-illegal-mining-in-karnataka-chief-minister_100388677.html
Chief Minister B.S. Yeddyurappa:
there has been largescale illegal mining in Karnataka in the last 10 years
in 2007-08 alone, 4.7 million tonnes of iron ore was exported from the state without a license

Santosh Hegde, a retired Supreme Court judge and anti-corruption ombudsman of Karnataka:
5,00,000 tonnes of about 8,00,000 tonnes of illegally mined iron ore stored at Belekeri port and seized by the authorities had been exported
scam could involve up to 5 million tonnes of illegally mined ore being exported from the port
In terms of money, it would be around Rs.2,500 crore (Rs.25 billion)

Alleged threat by the BJP's Bellary legislators to bash up Congress and JD-S members on Friday if they visited Bellary made JD-S members come to the house (legislative assembly) wearing miners' helmets saying their life was not safe even in the assembly. The Congress has put the illegal export figure as a Rs.600 billion scam.

Cong, JD-S raise pitch on mining scam, continue dharna Tue Jul 13 2010
http://www.indianexpress.com/news/cong-jds-raise-pitch-on-mining-scam-continue-dharna/645756/
Opposition Leader Siddaramaiah:
law and order has collapsed
it appears as if (mineral-rich) Bellary district is a separate state, not even part of Karnataka.

Unbridled illegal mining makes Yeddyurappa fret and sob (Letter from Bangalore)
Monday, July 12, 2010 11:28:01 AM
http://www.thaindian.com/newsportal/politics/unbridled-illegal-mining-makes-yeddyurappa-fret-and-sob-letter-from-bangalore_100394348.html 
Over 7.1 million tonnes of iron ore was illegally exported in 2009-10, a year after he assumed office and the highest in the last seven years, according to figures given by the chief minister to the assembly Friday, July 9, 2010.

This is in stark contrast to the over 3.3 million tonnes illegally exported in 2008-09, the first year of BJP rule.

In 2003-04, the figure was over 2 million tonnes, the next year 5.2 million tonnes, in 2005-06 it came down to 2.1 million tonnes, more than doubled to 4.7 million in 2006-07 and went up to over 5.7 million tonnes in 2007-08.

A grave charge against the Reddys, who own the Obulapuram Mining Company, is that they have erased the boundary marks between Karnataka and Andhra Pradesh to make it difficult for the two states to determine which side of the border the illegal mining is on.

The Reddys, just a decade old in BJP, have acquired huge clout in the party and the 67-year-old Yeddyurappa is in no position to rein them in though he is associated with Rashtriya Swayamsevak Sangh (RSS) since around 15 years and Jan Sangh/BJP for the last 38 years.

Yeddyurapppa sobbed in front of TV cameras last year as he was forced to drop his confidante Shobha Karandlaje from the ministry and shunt out trusted officials from his set up to buy peace with the Reddys who had revolted against him.

He shed tears again at a public meeting last month in the presence of senior BJP leader Sushma Swaraj, whom the Reddy brothers refer to as their "thayi" (mom/mother), over the opposition ridiculing him for hosting the Global Investors Meet when the state is suffering from power shortage, the inadequate infrastructure even in IT hub Bangalore and the illegal looting of precious natural resources.

State saw 30 mn tn of illegal iron ore exports in 7 yrs - Business Standard July 12, 2010, 0:26 IST
Illegal export of iron ore from Karnataka
reached alarming proportions in the last seven years
the state saw over 30 million tonnes being exported from various ports in the country
7.1 million tonnes during 2009-10 (110% more than 2008-2009)
CM admits illegal mining in State - Deccan Herald July 09, 2010
http://www.deccanherald.com/content/80468/cm-admits-illegal-mining-state.html
3.04 crore tonnes of ore exported without valid permits since 2003
Karnataka seeks ban on export of iron ore, minerals Saturday, July 03, 2010 7:47:51 PM
http://www.thaindian.com/newsportal/business/karnataka-seeks-ban-on-export-of-iron-ore-minerals_100390236.html
Chief minister B S Yeddyurappa to the Karnataka state legislative assembly
Rampant illegal mining in Karnataka
Over the past seven years, the export of illegal iron ore was higher than legal exports
There is a mafia behind the illegal mining
Fake permits are being used to transport iron ore
Illegal transport is causing heavy damages to the State roads
Some politicians, officials/bureaucrats of forest and police departments are involved in this illegal business with government losing heavy revenue
Damage caused to the environment is unimaginable and irreparable
Illegally mined ore has not only been exported from the ports of Karnataka but also from Goa, Krishnapatnam, Vizag, Kakinada and Chennai
There are more than 15,000 illegal mines under operation in/across the country, while the total number of valid mining leases are only 8,700
Karnataka accounts for 8% of the 164,000 hectares of forestland under mining in the country
Department of mines recovered 650,762 tonnes of iron ore that was illegally mined and stored in godowns in the districts of Bellary, Chitradurga and Tumkur and auctioned it for Rs 39.1 crore

http://www.ndtv.com/article/india/why-the-bjp-wont-act-against-the-reddy-brothers-37524 
Karnataka Guv to the PM and Union Home Minister
Discussed the influence of Reddy brothers is increasing, how they are exploiting their position in the Cabinet and that their illegal mining activities are destroying the rule of law in the state
There had been political interference in the functioning of various departments

Illegal mining is scam of the century: Siddaramaiah The Hindu Wednesday, Jun 30, 2010
http://www.hindu.com/2010/06/30/stories/2010063064000600.htm
Leader of the Opposition Siddaramaiah:
Rs. 3,000-crore worth iron ore is being mined illegally
Mining in Bellary, Hospet, Sandur taking place without valid permits
Iron ore was being mined illegally in Bellary, Hospet and Sandur without valid permits, without paying royalty, forest development tax and value-added tax to the Government
Despite a criminal case against the illegally stocked iron ore at the Belekeri port, it was shipped out
As much as Rs. 3,000 crore worth iron ore was being mined illegally
Though there are seven check-posts from Bellary to Karwar, none had seized the illegally transported ore
The Forest and Mines and Geology portfolios were directly under the charge of Chief Minister B.S. Yeddyurappa

PM sore over illegal mining in Karnataka - Deccan Herald March 20, 2010
http://www.deccanherald.com/content/59165/pm-sore-over-illegal-mining.html

MSPL claims illegal mining in K'taka - Headlines Today July 9, 2010
http://indiatoday.intoday.in/site/Story/104744/104/mlas-protest-against-reddy-brothers.html
Reports of rampant illegal mining in Karnataka stand further strengthened.
MSPL Limited
One of India's largest mining companies
Has alleged that three other companies had been mining illegally in the Bharata Rayan Harivu (BRH) mines in the state's Sandur forests
Claims it has documents to show how Trident Minerals, S.B. Minerals and Veeyam Minerals had been illegally extracting and exporting iron ore from mines belonging to the company
Said the plunder was to the tune of Rs 2,484 crore
Which owns 819 acres in the BRH mines, says the three companies had encroached upon its mines since March 2009
Alleges that S.B. Minerals - owned by BJP MLA Anand Singh has encroached upon 24 acres of its Vyasanakere mines in Bellary
In September 2009, the Karnataka Lokayukta had surveyed the area after a complaint
Had asked for mining to be stopped
Said illegal mining was continuing and around 45 lakh tones of iron ore had been mined since 2009

BJP MLA under encroachment cloud Times of India July 18, 2010
http://timesofindia.indiatimes.com/city/bangalore/BJP-MLA-under-encroachment-cloud/articleshow/6182043.cms 
MSPL executive director (mines) Meda Venkataiah on Sat July 18, 2010:
Singh had grown richer by Rs 960 crore through illegal mining over the last few years
SBM leased an area of about 200 acres adjacent to MSPL since 1970
But Singh has encroached upon it with the blessings of district in-charge minister (G Janardhan Reddy)
So far, he has mined eight million MT, valued at Rs 960 crore
He is sharing this money with the minister

35 lakh tonnes of illegal iron ore stored at ports The Hindu Sat, July 18, 2010
http://www.hindu.com/2010/07/18/stories/2010071858550500.htm
Permits were issued only for 21.85 lakh tonnes
None of the 58 firms claimed ownership of ore
State Government to the Karnataka High Court
In all 35,31,918 tonnes of unauthorised ore had arrived at Karwar and Belekeri between November 2009 and February 2010
In an interlocutory application (IA) seeks/sought a ban on export of iron ore from the three ports of Karwar, Belekeri and Mangalore
Permits had been issued for only 21,85,452 tonnes while the total quantity of ore that had arrived at Karwar and Belekeri ports was 57,17,370 tonnes
35,31,918 tonnes of excess ore had arrived illegally
It was not known to whom the ore belonged and where the ore had gone
apart from some of the unauthorised export, ores could be hidden in and around several small and minor ports in Dakshina Kannada and Uttara Kannada districts
Ban export of ore from the three ports to enable the State to complete the investigation
Four stevedores at the Belekeri port had furnished a list of 58 firms to which the ore belonged
Even 75 days after the ore was seized, no firm or individual had come forward to claim ownership of the ore
Justified the proposed ban on exports of iron ore
To implead the Lokayukta in the case
It was just and necessary to make the Lokayukta a party in the case as the agency had seized records and documents when it conducted a raid on the Belekeri port to investigate the illegal transport and export of iron ore

Even Centre admits: Our men scared of Reddys - Thu Mar 18 2010, 01:24 hrs
http://www.indianexpress.com/news/even-centre-admits-our-men-scared-of-reddys/592358/0
BELLARY/HYDERABAD/NEW DELHI:
THE INDEPENDENT REPUBLIC OF REDDYS
Set against the mighty Reddy Republic, these two miners are small players. But their stories are remarkably instructive since these capture the sweep of alleged irregularities that the Reddys are being scrutinised for - by the Supreme Court's empowered committee, by the Karnataka Lokayukta, by a three-member panel appointed by the Andhra Pradesh Government and now by the Central Bureau of Investigation (CBI) as well.

One of the miners is Tapal Ganesh, whose January 2009 petition before the Supreme Court rocked the entire mining industry. The influential Reddys, Ganesh claimed in his petition, had encroached on his 11-hectare Tumti Mines, which borders the 68.5-hectare mine of their Obulapuram Mining Company (OMC). The Reddys deny the charge but this was the first time someone had openly challenged their clout. The next hearing in the case is on March 22.

"This was plain landgrab and no one had taken it up the way I did," says Ganesh, who followed up his petition with an Interim Application (IA) on May 1, 2009 in the writ petition filed by another big rival of the Reddys, S K Modi, the owner of Bellary Iron Ores Private Ltd (BIOP). In his petition, Modi, one of the biggest miners in the region, had sought demarcation of boundaries by the Survey of India in a timebound manner. He met The Indian Express but declined to be quoted on the dispute.

None other than Union Mines Minister B K Handique backs Ganesh's testimony.

"It is not that the Reddy brothers themselves come and throw them (their rivals) out. They will never do that. He (Janardhana Reddy) is a Minister. They have private soldiers. They call it their private army. I tell you that even our officials of IBM (Indian Bureau of Mines, the mining regulator) are scared."

"We have to sometimes call them here (Delhi) and give them encouragement. We tell them that we are with you... otherwise everybody is scared," says Handique.

Ganesh's application sought to implead the Central Empowered Committee (CEC) of the Supreme Court and eventually led to the CEC preparing a detailed report on alleged irregularities by the Reddy brothers.

The CEC submitted its report to the Supreme Court on November 19, 2009, and recommended to the Andhra Pradesh government on November 23 that mining operations in six leases (four to Reddys, one to Modi and the last to Y Mahabaleswarappa & Sons) be suspended. The state suspended all activities on November 25. The case was further heard in the Andhra Pradesh High Court, which on February 26 set aside the suspension and noted that the CEC should have given a notice to the Reddys before submitting its report. The Reddys soon obtained permits to restart mining.

"There were many who told me I was waging a futile war and even said the Reddys may be willing to settle out of court, but I didn%u2019t. There are about 70 active mines in the Bellary-Hospet-Sandhur belt. Of these, more than 60 per cent have succumbed and have let the Reddys raise a contract in their mines or offered them a share in revenue. Sab bik gaye," says Ganesh.

RAISING A CONTRACT
IF TAPAL Ganesh makes his defiance public, another influential miner doesn't want his name to be used. He meets The Indian Express on the condition that he be identified only as "a leading Congress politician" with mines in Hospet.

"I hung on for almost eight months from April 2009," he says, "but I finally had to give in because global iron ore prices may not remain high forever and I do not want to lose out."

He claims to have agreed to "pay a share of the revenue in return for obtaining permits". When asked why he did not go public at even a party forum, he says: "Some of my leaders have taken note. The CBI probe, agreed to by the Andhra government, is a result of their intervention."

Mines Minister Handique says that even the Prime Minister is aware of the situation in Bellary. "The Prime Minister is unhappy. All these things we have been doing is as desired by the PM. When illegal mining hogs the headlines, can the Prime Minister of any country remain indifferent? He cannot remain indifferent," he says.

Indeed, after Andhra Chief Minister Y S Rajasekhara Reddy died in a plane crash on September 3, 2009, things took a turn for the worse for the Reddys. The Andhra government agreed to the CBI probe offered by the Centre, but says Handique, Karnataka Chief Minister B S Yeddyurappa said "there was no need for it".

Chandrababu Naidu's Telugu Desam Party has routinely alleged a strong "political-business nexus" between YSR and Janardhana Reddy. "It was, in fact, YSR's idea to allot mines to OMC along the Andhra-Karnataka forest borders. Disputes take years to be resolved, by which time the lease itself will expire," says M V Mysura Reddy, Rajya Sabha MP, who has prepared a dossier on what the TDP alleges is the state's "mining mafia".

While the Hospet Congress politician (referred to above) claims to have agreed to "share 15 per cent" of the output in value, others just let the Reddys "raise a contract" with them, a practice that is rife though illegal, as explained in the report by Karnataka Lokayukta Santosh Hegde.

Speaking to The Indian Express, Justice Hegde explains how difficult it can be to monitor illegal mining. "Raising a contract" gives the contractor the right to extract, transport and sell iron ore from the mine of an original lessee. In return, the lessee gets a percentage of the output %u2014 between 15 per cent and 40 per cent - in cash or physical form itself.

"Such deals suit the Reddys most since their names do not figure in official records. There is no paper trail. Even if there is one, nobody wants to share it. We all know it's happening," says Justice Hegde, who extensively toured the Bellary-Hospet-Sandhur belt for his 282-page report.

"Raising a contract allows the Reddys to use their labour and capital but some other miner's land to extract iron ore. My estimate is that in the Bellary region, the Reddys, with the district administration under their control, have muscled their way into many leases. This is how they achieved unprecedented scale and phenomenal wealth in a short period," says Justice Hegde.

BORDERS BLURRED
KALLOL BISWAS, Deputy Conservator of Forests, Anantapur, where the Reddy mines are located, refers to the "partnership agreements" that OMC has with mines in Karnataka adjoining theirs in Malapanagudi and Siddhapuram villages in Andhra Pradesh. "These help the Reddys mine iron ore in Karnataka, transport it to Andhra Pradesh and show it as production from the mines they have in Andhra," says a Karnataka official who spoke on the condition that he not be identified.

In one of the seven notices issued to OMC and Anantapur Mining Corporation in October-November 2009, Biswas says OMC obtained transport permits from the Mines and Geology Department in Andhra but illegally got iron ore from mines in Karnataka. "It is noticed that lorries are coming from Karnataka and passing through wide roads illegally laid in the Reddys' lease area (68.5 hectares) carrying high-grade iron ore," Biswas pointed out in his notice of November 1, 2009, to OMC.

This is corroborated by none other than V D Rajagopal, Director, Mines and Geology Department, Andhra Pradesh, whose office gives mining permits and also recommends leases. "Andhra Pradesh had 70,000 trucks illegally entering the state from Karnataka. We imposed penalties but let them in. It is for Karnataka to ensure the lorries do not cross state boundaries," he told The Indian Express, adding, however, that these trucks did not belong to OMC. Rivals of the Reddy brothers claim that since OMC does not have mines in Karnataka, iron ore cannot be obviously shown as being transported from Bellary into Andhra Pradesh.

The "partnership agreements" that Biswas talks about are not necessarily mutually acceptable. "As has been told to me... the Reddys are demanding a cut from others who are raising money, otherwise they will not get any permits. The only vehicles that are stopped without a permit or documentation are of those who did not give the Reddys their share," Justice Hegde says.

Janardhana Reddy, of course, denies this. Responding to the allegations in a detailed interview to The Indian Express (to be carried in a later part of this series), he asks for proof. "I will never do such a cheap activity. Tell me who is it. If he claims he has agreed to share revenue with us, let him show the evidence," he says when asked about the Congress politician's allegations.

These aren't the only complaints. According to the Indian Bureau of Mines, the number of complaints from Bellary have increased over the last two years.

For instance, the Reddys' arch rival Rahul Baldota, promoter of MSPL Ltd, who has five mines in the region, alleges that his mine in Vyasanakere has been encroached by mines belonging to a "friend" of the Reddys, BJP MLA Anand Singh. "I have personally complained to the Union Mines Minister," says Baldota.

"They trespassed into unallocated land, paid little heed to Motor Vehicles Act, misused permits and transported ore without paying forest development tax, octroi," says Tapal Ganesh. "This is famously known in Bellary as the zero concept - where no money is paid in Karnataka while transporting ore to ports," adds Baldota.

Investigators say that in the two years in which the Reddys emerged kingmakers in the state, they got many miners to accept their terms by getting district officials such as the Deputy Forest Officer or the Deputy Director, Mining & Geology Department, in Hospet to block permits.

Those who did not fall in line could still mine but their applications for transport permits remained in files. Baldota did not give in and knocked at the CM's office in Bangalore and at the Mines Minister's in New Delhi. Only early this week he received his first transport permit.

Asked why the delay, B Muthaiah, Deputy Conservator of Forests, Bellary, told The Indian Express: "MSPL has outstanding royalties of about Rs 90 crore. In some cases we have given permits following directions from the courts. We have given the records of these dues to the courts."

As reported yesterday, the Forest Department is only one wing of the state that is alleged to have bent over backwards to help the Reddys. There are others in the state and even ministries at the Centre which have helped the Reddys by merely looking the other way.

Reddys have the last laugh, national mines regulator has both hands tied - Fri Mar 19 2010
http://www.indianexpress.com/news/reddys-have-the-last-laugh-national-mines-regulator-has-both-hands-tied/592902/0 
BELLARY/BANGALORE/NEW DELHI: THE INDEPENDENT REPUBLIC OF REDDYS
Why does the regulatory apparatus appear toothless in the face of the Reddy Republic? Union Mines Minister B K Handique says that officials of the national mines regulator, the Indian Bureau of Mines (IBM), are too "scared" to inspect the Reddys and they need "constant encouragement". Ask these officials and they say what they need is more staff. The IBM regional office in Bangalore and Hyderabad, for example, responsible for about 500 mines each, has, at best, six officials to monitor and inspect illegal mining in the entire region.

An investigation by The Indian Express reveals there's another reason that no one talks about.

The Reddys' influence and clout - as detailed in the first two parts of this series - also derives from an absence of political will to lay down the law or usher in reform.

In fact, an unreformed mining sector has meant discretion in award of licences by the state and the Centre, poor accountability, non-revision of royalty rates in time, an audit framework that exists only on paper and a neglect of oversight by state agencies.

Consider this: In the seven years since Obulapuram Mining Company, the Reddys' flagship, obtained its first lease in 2002, IBM has inspected its mines just thrice against the required 14 (twice each year). More shocking is an instruction from the IBM headquarters in Nagpur to its Hyderabad office in August 2008 to stop inspecting mines of OMC and Anantapur Mining Corporation, both owned by G Janardhana Reddy and his brothers. The IBM's reason: these mines were the subject of legal disputes and so "sub-judice". Result: the IBM concluded that OMC and AMC had over-exploited mines - mined way above their specified limits without the requisite prior approvals - and yet, it tied its own hands.

MONITOR LOOKED THE OTHER WAY
Official records, interviews with regulators and investigators reveal how the Reddys took advantage of the IBM's regulatory lapse.

For five years in a row, between 2004-05 and 2008-09, when global iron ore prices zoomed 500 per cent spurred by Chinese demand, OMC over-exploited its most productive mine of 25.98 hectares. Against the permission by IBM to extract 6.48 million tonnes during the period, OMC extracted almost twice this amount %u2014 11.88 million tonnes. In another adjoining mine over 39.5 hectares, OMC mined 2.02 million tonnes during 2007-08 and 2008-09 against its approved mining plan for 1.64 million tonnes.(see chart)

"Every company is required to submit a five-year mining plan to IBM based on scientific extraction principles. OMC extracted double the quantity it originally said it would produce," said an official with IBM in Hyderabad who did not wish to be quoted.

In the only two inspections that were carried out by IBM in September 2004 and January 2005, officials did detect violations of over-extraction, to which OMC submitted a modified mining plan only after about 18 months.

When contacted, IBM Controller General C S Gundewar said: "Whenever we detect any violation, we issue show-cause notice to the violators. Till now, about 5,400 mining leases have been granted. You need to understand that we are under-staffed. We may not have visited small mines in the past two years or so. But we need to realise that the basic responsibility of tackling such issues lies with states as it is they who allocate the leases," he told The Indian Express.

Passing the buck
Such passing the buck between the Centre and states is not restricted to regulation alone. It starts from the very first step, of awarding licences. The role of the Union Ministry of Mines is limited to granting prior approval for prospecting and mining licences, recommendations for which are made by states.

The Centre accords prior approval, but licences are finally issued by states. As the Andhra Pradesh High Court observed in its recent February 26 judgment that set aside the suspension of mining leases, including four to the Reddys ordered by the state government, the state cannot suspend leases before obtaining the Centre's approval. But Union Mines Ministry officials say the Centre has little stake, and worse, no knowledge about mining activities in leases once they are allotted by states. In fact, it has been toying with the idea of doing away with the requirement of prior approval when it moves comprehensive amendments to the Mines and Minerals (Development and Regulation) Act, 1957. This will empower states, but the move has been opposed by a section of the government - the Steel Ministry, which wants iron ore to be treated as a national resource.

Says former civil servant Jayaprakash Narayan, president, Loksatta Party and the lone MLA of his party in Andhra Pradesh: "Natural resources are scarce. The best and most transparent way to allot mines is to auction them."

But unfortunately, the archaic MMDR Act doesn%u2019t provide for auction. "So, the allotment is completely discretionary," says Narayan. Mines Minister Handique says views from states and other stakeholders need to be taken on board before taking a final call on this.

While the Centre does have a regulatory role through IBM, states also have to follow specific guidelines before allotting mines.

"One such crucial guideline is to give preference to applicants proposing value addition. But there is no scrutiny and follow-up action if a company does not implement what it proposed when applying for a licence," says Arvind Shrivastava, a 1994 batch IAS officer who served as Bellary District Collector for about three years till June 2008, but is now Managing Director, Karnataka Urban Infrastructure Development Finance Corporation, in Bangalore.

MSPL Ltd, for instance, proposed a steel unit when it applied for a lease but never built one. MSPL, a known Reddy rival, has five mines in the region and is a big-league player with enough financial muscle to take on the brothers, pointed out a Karnataka Mines & Geology Department official.

The issue where mining directly impinges on public finances is royalty. States, being owners of natural resources, collect royalty too, but then the rate is fixed by the Centre. So even when iron ore prices topped $150 a tonne in 2007-08 and the Reddys made a killing, the Centre sat over a proposal to hike royalty rates (a paltry Rs 27 a tonne then) for two years since mid-2007.

"The Centre is equally responsible for this mess. They let the Reddys get away by paying only a pittance as royalty," says a former Director in the Mines & Geology Department in Karnataka. Handique admits to delays and discrepancies in royalty rates but says he was not the Minister then.

According to sources in the CBI, the agency has obtained information about under-invoicing of iron ore exports by OMC too. "The Customs department could have caught this if it was alert," said a source. For instance, during 2007-08 when prices almost touched $150 a tonne, OMC was exporting iron ore to a company, GLA Trading, Hong Kong at almost half the price. "We are verifying the information with the Customs department in the Finance Ministry," the source added not willing to come on record since the CBI probe is still on.

State blocked reforms
While the Reddys' business boomed with the Centre's bungling on policy issues, Karnataka turned its back on many procedural recommendations related to mining and post-mining activities such as computerisation of transport permits, restricting their validity to just a week compared with 30 days now, bar-coding of permits so that entry-exit is monitored, covering of trucks laden with iron ore to stop pollution and having enough check posts to stop them from illegally crossing borders.

After the state Lokayukta Justice Santosh Hegde submitted an elaborate report on illegal mining to Karnataka on December 18, 2008, the state government did form a committee under its Additional Chief Secretary to advise on its recommendations.

When contacted, Justice Hegde told The Indian Express that he did receive an "action-taken" report from the state government. "But it was not an ATR, it was an action-to-be-taken report. The Chief Minister seems to be lacking in will to implement the Lokayukta%u2019s recommendations," he said.

The state continues to drag its feet. "We have computerised the existing 30-day bulk permit system and currently computerised permits are being issued. The issue of a modified system wherein permits contain vehicle numbers and are valid for just seven days is still in the court. We have submitted a schedule for implementation of the modified system to the court while seeking a vacation of the stay," says B S Ramaprasad, Secretary, Commerce and Industries (Mines, SSI and Textiles) and nodal officer for implementation of measures to prevent illegal mining based on Hegde's report in the Karnataka government.

The Andhra Pradesh government, too, bent rules helping the Reddy brothers and big miners. The Environment, Forests, Science and Technology Department of Andhra Pradesh relaxed norms for Obulapuram Mining Company and a couple of other miners by doing away with the requirement of obtaining forest permits to transport minerals from mines located in the Bellary Reserve Forest.

So iron ore was extracted and moved in forest land and the department remained clueless. The AP Forest Department did not follow up on the seven notices that were served on OMC and AMC in quick succession for illegal mining by Anantapur Divisional Forest Officer Kallol Biswas during October-November 2009. Biswas told The Indian Express he was awaiting some signal from his superiors so that he could go ahead and slap a penalty on the Reddys.

The AP Forest Department, on the contrary, withdrew a February 23 notice issued by it to finally demarcate boundaries of the six mining leases along the Andhra-Karnataka border beginning March 2. The fixing of boundaries was to be undertaken by the Survey of India in the presence of officials from both states. The withdrawal of the notice to survey on February 25 followed a contempt notice issued by OMC and AMC. Jairam Ramesh, Union Minister for Environment and Forests, did not respond to mails and calls for over a month to explain his Ministry's inability to stop illegal mining in unallotted forest land.

"Clearly, the Reddys do not want the state border survey. They will be exposed then," says Tapal Ganesh, whose special leave petition in the Supreme Court came up for hearing on March 22. With one of the brothers, G Karunakara Reddy, the Revenue Minister in Karnataka Cabinet, there is little or no attempt by the government to re-fix boundary pillars for the six leases. "We are trying our best to tackle illegal mining. Our Joint Task Force has inspected numerous mines in Karnataka, Andhra, Orissa, Jharkhand. So far, we have suspended operations in 60 mines of which 10 are in the Bellary sector," said Gundewar. But he is the first one to admit that this sudden burst of activity so late in the day may achieve little.

For Janardhana Reddy, though, all these charges are at the behest of bitter business rivals. "At this point and all, only the jealous are calling our mining (activities) illegal. Why they are saying illegal mining is happening and targeting (us) like this... God only knows. Let them show if there is any illegal mining at all."

Eminent people seek CBI probe into mining issue The Hindu Saturday, July 18, 2010
http://www.hindu.com/2010/07/18/stories/2010071852720400.htm 
It was a conflict between a corrupt political system and the well-being of the people of Karnataka
Karnataka Government should hand over the inquiry to the CBI because The issue is not restricted to only this State, but has national and international ramifications
The disappearance of 23 lakh tonnes of iron ore from Belikeri port, even after being seized by the Lokayukta, questions the very existence of the Government

I might seek CBI help, says Hegde Deccan Herald Saturday, July 18, 2010
http://www.deccanherald.com/content/82036/i-might-seek-cbi-help.html Lokayukta Santosh Hegde on Saturday said that if the State Government expected him to conduct a comprehensive investigation into mining, he would require additional security to do field work, and may seek the help of Central Bureau of Investigation (CBI).
Lokayukta Santosh Hegde:
I will not be asking for more than four to five officers of my choice
I may also seek the help of the CBI
The government need not have apprehensions that the CBI would be probing the issue
But I may seek information from the CBI
Know how the mining barons in ore rich districts of Karnataka operated.
Hence, no individual can claim that he has no mining lease in Bellary and therefore he is not into illegal mining.
We know how the system works in Bellary.
So, if somebody says that I have no mining lease in Bellary and I am not into illegal business, I do not subscribe to it.
Would have problems only when someone interfered in the investigation
would take up investigation which he can complete in one year

Hegde refuses to endorse CM's clean chit to Reddys Deccan Herald, Tue, July 20, 2010
http://www.deccanherald.com/content/82365/hegde-refuses-endorse-cms-clean.html
Lokayukta Justice N Santosh Hegde:
prefers not to give a clean chit to any individual in the dock before investigation
Chief Minister might have given a clean chit to Bellary Reddys
But I don't issue certificates to anyone prior to investigation
I will give my judgement only after a thorough probe
said he has the authority to investigate into mining within the state's boundaries
has to seek assistance of Central agencies to investigate into export of ore through ports in neighbouring states
said he'd hold a meeting of the officers who had already been investigating illegal mining and constitute a task force of police officers for inquiry.

Illegal export of iron ore under Lokayukta ambit Deccan Herald, Tue, July 20, 2010
http://www.deccanherald.com/content/82373/illegal-export-iron-ore-lokayukta.html
The State government on Monday extended the scope of an ongoing Lokayukta inquiry to include illegal extract/mining and export of iron ore in excess to the permits granted during the last 10 years.

Janardhan Reddy's firm indulged in illegal mining, says Kumaraswamy The Hindu Tuesday, July 20, 2010
http://www.hindu.com/2010/07/20/stories/2010072061810800.htm
Former Chief Minister H.D. Kumaraswamy and JD(S) leader:
Illegal mining done by Janardhan Reddy's firm during 2005-2006
Alleged that the Anantapur Mining Corporation (AMC), owned by Tourism Minister G. Janardhan Reddy, had indulged in illegal mining during 2005-2006 in a mine owned by M/s Black Gold (Iron Ore) Mines and Minerals (BGMM), near the Andhra Pradesh boundary with Karnataka, at Bellary
Also alleged that over 1.94 lakh tonnes of iron ore was transported illegally to AMC from the mines of BGMM during the same period in violation of the orders of the Supreme Court
Displayed the documents in this regard
Activities at the mine owned by BGMM came to a halt in 1981 owing to a Supreme Court order following boundary dispute between the two States, and in 1992 the mining lease granted to that company expired
BGMM in 2004 had sought permission of the State Government to transport ore, claiming that about 3.5 lakh tonnes of iron ore extracted prior to stoppage of mining was lying in the mine and the Forest Department had denied permission for it
BGMM questioned this action before the Karnataka High Court, which in September 2004 allowed the company to lift the ore following which permits to transport ore was given to BGMM
Relying on the copies of mineral transportation permits issued in favour of BGMM ore from BGMM were transported to AMC at Obalapuram (in Andhra Pradesh) and to Mangalore Port
While quoting from the income tax returns and financial statement of AMC, he said even though the transport permits were issued in the name of BGMM, the royalty amount was paid from the accounts of AMC and this establishes that it was AMC that was carrying out transport activities and BGMM (which had become defunct after stoppage of mining) was represented only on paper
Relying on documents of the Forest Department, said that even though the High Court permitted only transportation of ore extracted prior to stoppage of mining, the reports of inspection of the mines point out that fresh mining was carried out in the mine in the guise of transportation of old ore during 2005-06 taking advantage of the court order, and at least 1 lakh to 1.25 lakh tonnes of mine was extracted afresh during this period
Though the Supreme Court on February 24, 2006 stayed the order of the High Court permitting transportation of ore, the Mines and Geology did not stop transportation and issued transportation permit in violation of the Supreme Court order and claimed that about 1.94 lakh tonnes were transported illegally to AMC after the order of the court.

CONCLUSION: In the light of the above facts we request those concerned
1) for a joint investigation by the CBI and the Karnataka Lokayukta
2) to disqualify and prosecute all miners / ministers / legislators who are guilty of illegal mining irrespective of their political affiliation(s) / financial clout and muscle power whoever they may be and however high they may be.
----------------------------------------------------------------------------------------------
This petition's been addressed to the Hon'ble Supreme Court of India, President, Prime Minister (PM), Union Ministry of Mines (UoM), Indian Bureau of mines (IBM), Union Ministry of Environment and Forests (MoEF), Karnataka Lokayukta, Central Bureau of Investigation (CBI), Election Commission of India (ECI), Central Vigilance Commission (CVC), Karnataka Governor/Guv, Chief Minister (CM), Karnataka Forest Department (KFD) and Chief Secretary.