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Reddy may face CBI probe for Karnataka mining operations

Reddy may face CBI probe for Karnataka mining operations
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First Published: Fri, Sep 23 2011. 01 07 AM IST

Updated: Fri, Sep 23 2011. 01 07 AM IST
A Supreme Court-appointed committee has asked for a criminal investigation into G. Janardhan Reddy’s mining activities in Karnataka, separate from the case against him in neighbouring Andhra Pradesh.
Reddy, former tourism and infrastructure minister in the Bharatiya Janata Party government in Karnataka, is already in custody after the Central Bureau of Investigation (CBI) found evidence of his involvement in illegal mining in six leases in Andhra Pradesh through his Obulapuram Mining Co.
In an unprecedented move, the central empowered committee (CEC) on Thursday recommended to the Supreme Court to direct a CBI probe into Reddy’s mining activities in Karnataka.
This is the first time the CEC has gone beyond environmental concerns into the criminality of illegal mining and its ancillary activities.
The CEC claims Associated Mining Co. (AMC), was mining more than what was possible from its mining lease area in 2009-10 and that Reddy transferred the lease into his control in 2009 using “dubious means”. The CEC has asked for a CBI probe into AMC’s operations as well.
E-auction of iron ore
Pursuant to a recent Supreme Court order a monitoring committee has started an online auction of 25 million tonnes (mt) of iron ore stocks in Karnataka through state-owned trading company MSTC Ltd at Rs 3,400 per mt.
The sale is expected to fetch the state exchequer Rs 340 per mt in royalty. The court has directed the state to use a part of this royalty to rehabilitate areas damaged by illegal mining.
In 2010-11, Karnataka earned Rs 434.76 crore in royalty from the sale of about 33.75 mt of iron ore, at Rs 129 per mt.
The CEC has also recommended that state-owned NMDC Ltd be allowed to continue mining at its two large leases in Karnataka to ensure a steady supply of iron ore for domestic steel makers. This ore will also be sold through e-auctions by MSTC and the monitoring committee.
“Keeping in view the public interest including the requirement of iron ore and associated industries, the complexities of the situation prevailing in the district Bellary and considering the matter in its totality the CEC is of the view that the balance of convenience may lie in M/s NMDC Ltd being allowed to continue the mining operations” in its two leases, the CEC said in its report.
Resuming mining
The CEC said mining operations in Bellary, Chitradurga and Tumkur districts may be allowed to resume, but only after a macro environmental impact assessment and a reclamation and rehabilitation plan are submitted by the Indian Council of Forest Research and Education.
The CEC has found leases owned by NMDC, Mysore Minerals Ltd and SMIORE Ltd are not involved in illegal mining and they might be allowed to resume operations at the earliest.
The committee has classified illegally mined leases into two categories—lease areas that can be rehabilitated and lease areas that have borne “substantial illegal mining”.
In the first category, the CEC recommends these lease areas can become operational after they are suitably rehabilitated and a scientific mining plan comes into place; for the second category, the CEC makes the same recommendation but goes a step further to say the leases must be cancelled and the owners pay penalties.
A joint team comprising the CEC, Karnataka government and Lokayukta officials is scheduled to complete work relating to the “field survey and the finalization of the sketches” of Bellary, Tumkur and Chitradurga by 15 November.
The Supreme Court’s forest bench will take up the CEC’s latest report at a hearing on Friday afternoon.
nikhil.k@livemint.com
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First Published: Fri, Sep 23 2011. 01 07 AM IST