Blow to Gali as SC further suspends iron ore mining

Published: 19th April 2013 09:56 AM  |   Last Updated: 19th April 2013 09:56 AM   |  A+A-

In what is being seen as a setback for jailed former Karnataka minister Gali Janardhan Reddy, the Supreme Court on Wednesday ordered that  “illegal mining” of iron ore on AP-Karnataka border would remain suspended till a clear demarcation of the boundary between the two states is done. The apex court also cancelled 49 mining leases, where a number of irregularities had been reported in Bellary, Tumkur and Chitradurga districts in Karnataka.

The court, however, allowed resumption of operations in mines where ‘illegal mining’ was not very pronounced, as recommended by a Central empowered committee (CEC).

The Central empowered committee, which made recommendations to the apex court, had divided the mines in the area into A, B and C categories.

The mines where there were very few or no irregularities were categorised as ‘A’ and those with a large number of irregularities were placed in category ‘C’, and the rest in ‘B’ category.

A bench of justices Aftab Alam, KS Radhakrishnan and Ranjan Gogoi passed the order on a plea by NGO Samaja Parivartana Samudaya, which alleged that large-scale irregularities and illegalities were being committed by various private mining firms as well as the state-owned Mysore Mining Ltd (MML), which hold licences to mine in Bellary, Tumkur and Chitradurga districts.

On September 3, 2012, the apex court partially lifted its ban on mining operations in Karnataka and gave a green signal for extraction of iron ore in 18 leases in category

A mines, subject to certain conditions being fulfilled.

The bench accepted the CEC report which had said 18 leases be allowed to carry on their business as they have not violated any rules.

Janardhana Reddy, the promoter of Obulapuram Mining Company, was the unquestioned leader in iron ore mining on AP-Karnataka border till the CBI put its foot firmly down in 2011, while probing his role in mining.

The CBI arrested Reddy, along with his brother-in-law BV Srinivasa Reddy on September 5, 2011, in Karnataka and lodged them in Chanchalguda prison. The case against Janardhan Reddy was that he had influenced the then YSR government and had GOs issued, which helped him export iron ore from Krishanpatnam port in Nellore district.

The charge against the state mines department was that iron ore mines should have been allotted to OMC on the condition that the ore mined sould be utilised by Brahmani Steels, proposed to be set up by Janardhan Reddy in Kadapa district. When the GOs were issued, there was no mention of the fact that the iron ore mined had to be utilised by Brahmani Steels, which helped the OMC to export it to other countries and mint money.

The CBI also arrested senior officers, former vice-chairman and managing director of AP Mineral Development Corporation VD Rajagopal and former industries secretary Y Srilakshmi for the preferential treatment given to OMC. The OMC had iron ore mining leases in 134 hectares in Anantapur district. The iron in this area is estimated to be around 100 million tonne.

The OMC found itself on the wrong side in tax payment too. Income Tax department found evidence that the company resorted to under-invoicing and evaded payment of `86 cr income tax.


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