Editor’s note

Behind the thick foliage the scars run deep and wide. The serenity and the silence of the forests in the country try to conceal the story of insatiable hu-man greed. Unfortunately, they fail. Home to abundant natural resources in the form of minerals, the forests have been subject to reckless plunder over decades. The ubiquitous bald patches and deep machine-made cavities tell the story.

Most of it has been plain thievery, surviving under the public radar with the help of goons and patronising politicians. Mining barons have always been powerful figures with potential to rock political boats. The Reddy brothers in Karnataka and Andhra Pradesh are a few we know of. But mining scandals are rampant across the country -- in Goa, in Orissa and elsewhere. There are bound to be many more.

So far, mining was at the cost of the locals -- the outsiders became richer ex-ploiting resources in their area while the locals sank deeper into poverty and deprivation. While all this happened the state looked away, abdicating its responsibility and allowing the greed of a few to take over and streamroll the hapless stakeholders in the mineral stock. But it was losing out too, in terms of revenue earning and popular goodwill.

The plunder had gone too far. It had to end. At least there had to be efforts towards this end.

At last, there’s some action. The government seems to have woken up to the reality in mining hotspots. On Friday, the Union cabinet approved on Friday a bill calling for coal miners to share a maximum 26 percent of their profits with local communities and for other miners an amount equivalent to royal-ties. There are other provisions to protect the locals and keep a check on the powerful mining barons.

It’s the beginning. Things could only get better from here.

Firstpost carried a series of reports exposing the irregularities in the min-ing sector and unearthed big scandals driven by influential people. Here is a selection of our exclusive stories on mining in India.

Yeddy, Reddy, Kamat? Goa’s Rs 800 cr mining scam is next

The country’s mining scandals have claimed one chief minister already. On 5 September, the Cen-tral Bureau of Investigation (CBI) arrested G Janardhan Reddy, former Karnataka minister, for the Obulapuram Mining Company’s role in illegal mining as documented by the Karnataka Lokayukta in July.

Since the CBI is said to be probing the roles played by as many as 65 mining companies, the logical question is: who will be the next big fish to be caught in the net?

The Goa Chief Minister, Digambar Kamat, bids fair to be the next target of inquiry. Official data and documents accessed by Firstpost on show that he either aided or abetted or looked the other way when illegal mining activities running into over Rs 800 crore were taking place. And this fig-ure refers to only illegal mining over the last four years.

For example, Goa government records show that there are 90 active iron ore mines in the state. But 48 of them were shown to be extracting more than what their environmental clearances (EC) allowed them. In other words, more than half the mines are breaking the law – and Kamat has done little to rein them in.

Anil Agarwal’s Vedanta Group – a mining and metals conglomerate that has courted controversy wherever it pitches its tent – is prominent in this law-breaking. Vedanta owns two major Goan mining companies – Sesa Goa and Dempo — which control 30 percent of the Goan mines. Kamat’s daughter is married into the Dempo family that used to control the company before it was acquired by Agarwal in 2009. Eighteen of the 48 excess mining cases involve Sesa Goa and VS Dempo.

Firstpost mailed a questionnaire to Vedanta, but got no response to it.

Asked why he allowed illegal mining that went against EC recommendations, Digambar Kamat deflected the blame. He told Firstpost: “The EC limit is given by Ministry of Environment and For-ests. Thus the Implementation of the EC clearance is the responsibility of the Ministry office locat-ed in Bangalore and also by the Pollution Control Board. Anyway, we are in the process of sending them notices.’’

Kamat, who has been minister for mines for 12 years, has allowed his own ministers and close aides and partymen to become ‘raising contractors’ and run iron ore mining businesses. He has also helped revive mining leases that date back to the era when Goa was a Portuguese colony, ig-noring the new mining laws that were legislated later.

That the chief minister of a state which derives a lot of its income from tourism, and where illegal drugs and the flesh trade flourish, should consider mining to be the most important ministry itself tells a story. Most CMs in the country retain the home ministry or critical ones like finance or in-dustry, but not Kamat.

Says Goa’s former Chief Minister Manohar Parrikar: “Kamat has been mines minister for years now. Everything else has changed, but his one portfolio hasn’t changed — that is mines. I could understand it if he was the minister only for only two-three years. But for 12 years, he has been mines minister. Kamat can’t absolve himself of every illegality and criminal conspiracy in the min-ing department.”

A whiff of Goan mining scandal was available when former Karnataka Lokayukta Santosh Hedge gave his report on illegal mining in Bellary. He hinted that Karnataka ores were being shipped to Goa for blending with the local ore – which have a low ferrous content.

The numbers speak for themselves. Goa has barely 5 percent of the coun-try’s iron ore reserves, but it exports 40 percent of the country’s total. The Chi-nese have been willing to buy anything from the Goans.

Kamat took a fancy to the mining ministry as far back as 1998, when he was a BJP MLA. In 2003-2004, when China was preparing for the Olympics, Kamat as mines minister presided over an export boom to China. Earlier, Goan ore was largely shipped to Japan, South Korea, the UAE, Pa-kistan, Netherlands, Romania and Italy. Within a year of Kamat’s entry, China became the major importer of low-grade Goan iron ore.

The Chinese purchased all the rejects and dumps, which were earlier being rejected by the min-ing companies as waste. In 2009-2010, China imported 31.5 million tonnes out of Goa’s 45 million tonnes of iron ore exports, according to the Goa Mineral Ore Exporters’ Association. The Beijing Olympics were probably built on Goan ore.

Kamat had a big role to play in this sea change. In 2003, he was mines minister in Manohar Pa-rikkar’s BJP government. In 2005, he defected to the Congress, when the Chinese boom was at its peak and the Congress was back in power. He remains the Mines Minister.

To understand why illegal mining is rampant in Goa, some history is in order. During Portuguese rule in Goa, some prominent local families, including Sesa, Dempo, Chowgule, Salgaocar and Timblos, were granted rights to mine iron ore in “perpetuity.” These families were given 336 such mining rights, called Title Concessions (TCs).

These TCs should have come to an end when the Indian Government enacted a new law in 1987 for Goan mines. The Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Min-ing Leases) Act, 1987, abolished all the Portuguese TCs and asked these families to apply for min-ing leases within a year’s time. It was also made mandatory for miners to get their leases renewed every 20 years, and all mines had to take environmental clearances (ECs) for each mine.

When these families moved the Bombay High Court against the 1987 law, they failed to get relief. In 1997 they appealed to the Supreme Court, which directed them to comply with all the conditions stated in the 1987 Act till the case was decided finally. Fourteen years hence, the case is still in the Supreme Court.

But that did not stop Digambar Kamat from bending the rules to favour miners and politicians.

Goa government records say only 90 mines were active in 2011. Of these 90 mines, 48 were found extracting more iron ore than the quantities prescribed under the EC limit during the past four years. The Ministry of Environment and Forests, when Jairam Ramesh was minister, had ordered a ban on fresh mining clearances till the matter is fully studied.

Sample these violations:

• Vedanta-owned Sesa Goa Ltd is permitted to extract 70 lakh tonnes from three mines annually (TC 126/53,

69/51 and 70/52), according to the EC limit. But it extracted an additional 1.68 lakh tonnes during 2009-10, according to official data.

• Vedanta had an EC limit of two lakh tonnes annually in mines with TC numbers 9/49, 10/49 and 3/54. In 2006, it has extracted six lakh tonnes more than the prescribed EC limit

• The EC limit for VM Salgaocar & Brothers Pvt Ltd was 16.92 lakh tonnes in four mines (TC nos 628/52, 19/58, 29/54 and 83/52). Salgaocar extracted 10 lakh tonnes more since 2006.

• VS Dempo (owned by Vedanta) has an EC limit of 11 lakh tonnes in three mines (TC Nos 20/54, 21/54 and 5/54. Dempo extracted 9.89 lakh tonnes of iron ore in addition to the EC limit in 2008.

• Chowgule & Co Ltd had an EC limit of 4.2 lakh tonnes from three mines (TC No 12/57, 38/51 and 22/50). It extracted an additional 4.6 lakh tonnes over and above the EC limit since 2006.

The list goes on and on as there are 48 of them breaking the EC limits. According to available records, over 95 lakh tonnes of iron ore were illegally mined during the past four years and its rough cost is nearly Rs 800 crore.

In addition, export records available at two exit points in Goa reveal that during the last financial year (2010-2011) alone, 50 lakh tonnes of iron ore may have been illegally mined and exported. The export price of 50 lakh tonnes is Rs 400 crore at the rate of Rs 800 a tonne.

- Raman Kirpal

How Goa’s illegal ore miners are in league with CM Kamat

A Goa minister buys two lakh square metres of land in a village and starts threatening neighbours to part with theirs. He wants to mine ore. An MLA starts digging his own agricultural land for ore. Before he is slapped a fine for illegal mining, he has already dispatched over Rs 4 crore worth of ore – and he is fined Rs 1.72 crore. Several mining leases have expired, but digging continues una-bated even as Chief Minister Digambar Kamat sits on the files.

How is Kamat complicit in the various illegal mining scams in his state? Are these sins of omission or commission? And what is the scale of these scams?

A conservative estimate made by Firstpost on the basis of official production and export data and environmental clearances put the figure at Rs 800 crore. Former Chief Minister Manohar Parrikar alleges that 20 percent of the mining in the state is illegal and the money involved is no less than Rs 4,000 crore.

But the man at the centre of it all is Digambar Kamat, who has been mines minister for 12 years running. According to insiders, he has been actively aiding companies that are in contravention of the law through various means.

Kamat has done this by two means: by reviving mining leases that failed to apply for renewals in time after a new law came into being in 1987. And two, by creating a new class of mining “contrac-tors” who are not the actual mine operators (and hence not amenable to action under the Act).

The law Kamat has helped undermine is the Goa, Daman and Diu Mining Concessions (Abolition and Declaration as Mining Leases) Act, 1987, which ended the previous Title Concessions

(TCs) given to miners when Goa was a Portuguese colony.

Under the 1987 Act, all the title Concessionaires (Sesa, Dempo, Salgaocar, Chowgule, Timblo, et al) were expected to apply for leases within a year, failing which their leases would lapse and be time-barred.

Says Goa’s Director, Mines, Arvind D Loliyakar: “The deadline for the application (for renewing leases) was 1987-88 and it was time-barred. Anybody can file the application after the deadline, but we are not entertaining them. Applications filed in 1996 were not condoned. It was time-barred. Who would like to go behind bars?’’

However, Firstpost has learnt that Kamat personally entertained applications for renewals of leas-es filed as late as 1996 and 2000. Ten applications for renewal were filed in 1996 and two applica-tions in 2000. Kamat condoned delays in two cases and has kept the remaining eight applications “under process.” This means his administration is considering condoning the remaining cases, too.

In one ‘condoned’ case, Kamat handed over three mines of the late Zoiram Ne-ogui to a Congress man, Dinar P Kamat Tarcar. Tarcar runs these mines through his company Minescape Earth Movers Pvt Ltd.

In the second condoned case, operator Magnum Minerals is extracting iron ore from Maina mines, whose application for the renewal of lease was filed in 2000 on behalf of the late owner Voicunta Canecar (Kadnekar).

Interestingly, Zoiram Neogui’s applicationwas filed in 1996, but Dinar Tarcar appeared as attorney for all the legal heirs of Zoiram and ar-gued that the delay be condoned in 2005, when the China market was hot. Kamat condoned the delay on two grounds. First, the delay was because of a family crisis due to the death of Zoiram. And second, the government of Goa was taking a liberal approach to condoning delays.

Listen to former Goa CM, Manohar Parrikar respond to opposition allegations on mining activi-ties in Goa.

Dinar Tarcar, who had lost the last Assembly election on a Congress ticket, does not designate himself as a mine operator. He is the “contractor” for four mines. Kamat has originated a tribe of “contractors”, many of whom are not registered and have no locus standi under the law.

In this new class of “contractor” miners, Kamat’s Urban Development Minister Joaquim Alemao tops the list. He is a self-styled contractor and calls himself Managing Director of Raisa Mining Services (named after his daughter). And his office address is 1/B, First Floor, Commerce House, Luis de Miranda Road, Margao, Goa, 403601. He has several mines on contract in South Goa.

With his eyes on mining, Joaquim Alemao bought two lakh sq metres of land in village Maina in South Goa. His land borders a farmhouse owned by a villager, Cheryl D’Souza, 43. Cheryl says Ale-mao is forcing her to sell her land for Rs 40 crore!

“The iron ore here is of high grade and he wants to do mining here, but I have resisted selling my land to him so far,’’ Cheryl says. Her husband, Tony Sanfrancisco, was electrocuted in an accident in 2006. She, her 85-year-old mother Dora, and her 11-year-old daughter Aki live in the farmhouse with four women servants. She cremated her husband in the farmhouse itself to deter Alemao from forcible acquisition of her land.

“There is not a young couple who can survive like us. Everybody is forced to sell the land. I am so disillusioned with the whole lot of them now. I see no hope,’’ says Cheryl.

Joaquim Alemao’s defence: “I am a contractor. I am not a miner.”

Another Congressman, who allegedly abets illegal mining in his constituency, is Vishwajit Rane. During the September 2010 by-election for the Valpoi constituency in Sattari taluka, the BJP sin-gled out Rane for illegal mining activity.

The story of greed doesn’t end here. In 2008, a team of experts led by Mines Director Arvind Loli-yakar went to Corgao, North Goa, for an inspection. They discovered that a Congress ally and close aide of Kamat, Nationalist Congress Party MLA Jitendra Deshprabhu, had begun digging up his own agricultural field in the hope of extracting iron ore.

Instead of booking him under illegal mining, Loliyakar made a request to Digambar Kamat to issue him a show-cause notice. But for three years, Deshprabhu was allowed to continue with the illegal mining. In January 2011, media protests forced the Kamat government to slap him with a fine of Rs 1.72 crore. But by then Deshprabhu had already mined and sold about 52,360 metric ton of iron ore worth Rs 4.18 crore. Under the law the fine is 10 times the illegal benefit – it should have been closer to Rs 50 crore.

Early last month, a local Goa court or-dered the registration of an FIR against Deshprabhu for illegal mining and Arvind Loliyakar and other government officials for abetting his illegal mining. Deshpra-bhu’s bail was rejected and he was later arrested.

Digambar Kamat, however, soldiers on – and appears to be friendly with many miners. In April 2005, when he defected to the Congress, the Timblos, a prominent iron-ore mining family of Goa, took him in their car to meet Margret Alva at Taj Exotica. The picture of him sittingwith one of the Timblos in their car was splashed all over the media.

The same Timblos, owners of Hotel Cidade de Goa, have taken to contracting. According to docu-ments available, Timblo Minerals Private Ltd is contractor at five mines and Timblo Minerals (P) Ltd is working as contractor on one mine.

Not only this. Kamat even handed over “enemy property” to the Timblos for mining. Badrudin Ma-vani, who owned a Title Concession (No 14) under the Portuguese, had moved to Pakistan

after partition.

Mavani’s mining lease was not given to anyone till 2004, when Kamat’s Directorate of Mines con-tended that the Timblo family had entire possession and control of the Mavani mining lease since 1957. It was also contended that there was no documentary evidence proving that Badrudin Ma-vani had lost Indian citizenship when he moved to Pakistan.

In the absence of Mavani, Kamat put his signature to handing over the Mavani lease to the Timblos for mining. To protect himself, Kamat took an “indemnity bond” from the Timblos in case Mavani or his heirs suddenly reappeared on the scene.

“It seems it (the mine) was transferred to Timblos long back,” Kamat claims.

Ever since the China market for ore boomed, the Goa mining industry is run as much by contrac-tors as genuine mine lessees. Among them: Magnum Minerals, Imran Traders, Hardesh Ores Ltd, Infrastructure Logistics (P) Ltd, and so on. Sources say an investigation will bring out the actual nexus between Kamat and these contractors.

In Goa’s Wild West kind of dubious mine ownership, illegal operations have become easy. At most mines, details about the name, the lease details, and survey numbers are missing from the site. These open cast mines exist right in the forest area – almost unseen, except by the locals employed there. The contractors who operate them are neither registered with Goa’s Directorate of Mines, nor are they recognised under the Mines and Minerals Regulation and Development (MMRD) Act as lessees.

In short, iron ore is often mined by people who have no claims to the ore.

Kamat ran a blind eye to mining operations that have yet to get their licences renewed. Accord-ing to official records, renewal applications of at least 13 active mining leases have been pending since 1988. This means for 26 years, the Goa government has allowed miners to extract iron ore from these illegally. Only fresh investigations can reveal the motive behind keeping these renewals pending for 26 years.

Even the mines which were cleared in 1988 had a licence validity of 20 years. But when these lessees applied for renewals in 2008, the files were kept “under process”.

Digambar Kamat’s justification: “Under the Mineral Concession Rules, if an application for renewal of a mining lease is not disposed of by the state government, the period of that lease shall be deemed to have been extended by a further period till the state government passes an order thereon.’’

By doing nothing, these leases have been made legal till the government acts on them. What kept his government sitting on these lease re-quests for 26 years? Kamat had no answers.

Firstpost believes that by keeping these renewal requests pending, Kamat has indirectly encour-aged illegal mining. Sample these:

• Thirty-two active mining leases have no forest clearance from the Union Ministry of Environ

ment and Forests. Prominent among them are VD Chowgule (five mines), VM Salgaocar (one mine), Soc Timblo Irmaos Ltd (four mines), Sesa Resources Ltd (one mine), Kund Kharse (three mines, which are operated by Timblos and Salgaocar as contractors) and Cavrem and Curpem Mines (owned by Shaikh Mohd Issac and Aziz SA Gofur).

• Eighteen active mining leases have not taken wildlife clearances under the EC. These include Sesa Mining Corp Ltd (Vedanta), VM Salgaocar & Bro. Pvt Ltd and MS Chowgule.

• At least 34 active mines have no air and water clearance.

Surprisingly, the lawyers who defend the mineowners in court are also on panels set up by the Ka-mat government.

The Goa Pollution Control Board sought the legal opinion of a senior high court advocate Atmaram NS Nadkarni, who has represented mineowners several times in the past. The board wanted to know if it could give air and water clearance to mines which had no forest and wildlife clearances.

Nadkarni recommended that the board can give consent under the Water and Air Act. At the same time it could ask these mines to suspend operations till they obtained mandatory forest and wild-life clearances!

The board adopted Nadkarni’s legal opinion and decided to give air and water clearances to all and urged them to suspend operations. Defending Nadkarni’s appointment, Kamat says: “Nadkarni was earlier the state Attorney General. He is a competent person.’’

“Goa is not only a story of its grand beaches. Goa has also been cursed with deposits of iron ores. Mine, mine and mine! This is Goa’s latest mantra of greed,’’ says Dr Claude Alvares, whose Goa Foundation is fighting illegal mining.

Calling Kamat the Yeddyurappa of Goa, Parrikar says: “If Yeddyurappa got half sunk during three years of his stint, you can imagine how deep Kamat must be into mines during his 12 years as Min-ister of Mines.”

Kamat was mines minister in Parrikar’s BJP ministry, but he defected to the Congress when the BJP lost power in 2005. Parrikar argues that Kamat would not have gone that far if the state had had a Lokpal.

“The state Assembly cleared the Lokpal Bill in January 2007 and Kamat is still sitting over it,’’ says Parrikar.

Kamat says he had sent the Lokpal Bill to the Centre for approval three times. “Two times, the Centre sent it back with some modifications. But the third time the Centre asked us to withdraw the Bill and introduce a new Lokpal Bill with different features. So I intend to introduce the new bill this session,” says Kamat.

Meanwhile, the scam will continue.

Former Goa CM Manohar Parrikar talks about licensing for mining in Goa, and the delaying in establishing a Lokayukta in the state:

- Raman Kirpal

Goa CM Kamat likely to lose job over illegal miningGoa Chief Minister Digambar Kamat’s days are probably numbered. As the state’s covert cham-pion of illegal mining for 12 years – that’s how long he has held on to the mines portfolio – First-post’s expose on the Goa mining scam could cost him his job, thanks to the interest Sonia Gandhi is now taking in the matter.

Firstpost broke the story on Goa’s illegal mining scandals on 5 September, and the Hindustan Times and various TV channels followed up the story over the last few days, setting the stage for a political intervention at the highest level.

On Wednesday, JS Brar, the person in charge of Goa in the All India Congress Committee (AICC), left for Goa to take stock of Kamat’s wrongdoing. He is expected to submit his report to Sonia Gan-dhi by Friday and the chances are that she will seek a change in the leadership. Given the time and effort the party has expended in making a villain out of the BJP in the Karnataka mining scandals that ultimately led to the ouster of BS Yeddyurappa and the arrest of Janardhana Reddy, Sonia may have no other choice.

Talking to Firstpost over the telephone, Brar said the AICC had received several complaints in regard to illegal mining against Kamat. “I am going to Goa to confirm the ground realities in the state.”

In our 5 September report, (Yeddy, Reddy, Kamat? Goa’s Rs 800 cr mining scam is next), Firstpost exposed how Kamat was in league with top mining companies in the state and how the miners were blatantly indulging in illegal mining under his watch.

Another Firstpost report (How Goa’s illegal ore miners are in league with CM Kamat) revealed how his ministers were running the mining business. A Firstpost reader compli-mented the publication for the gutsy piece and said we had “done more in this one article than the Goan media has managed in totality in the 50 years since decolonisation.”

However, Firstpost would have gotten nowhere without the evidence and support of the people who are fighting Goa’s illegal mining cartels from the frontlines.

In this story, we will highlight the names of some of the people who are fighting the miner-politi-cians of Goa in their backyards. If Brar wants to deliver true justice, he must meet them to get the right picture.

Our first fighter is Dr Claude Alvares, who runs a non-profit organisation called Goa Foundation and is leading the legal battle against illegal mining on several fronts. He is a ‘walking’ encyclope-dia on illegal mining and has a databank which should have sent Kamat packing a long time ago.

His databank categorically brings out the roles of top miners in the state, including Vedanta, Tim-los, Dinar Tarcar and Salgaocars.

Alvares is still a well-known name in Goa. But there are many unknown fighters who are battling the moneypower of the mining lobbies. Here are some of them.

Rama Velip, a tribal from village Co-lome in south Goa, had caught the manager of Kamat’s minister Joaquim Alemao for carrying illegal mining ac-tivities in his village. His small village, which is about 6 sq km in area, has 23 mining leases and three of them are still active. He is fighting a legal battle against the odds, and the miners work-ing in this village have slapped crimi-nal cases against him and 20 other villagers for allegedly trespassing on their property.

Another crusader is Ramesh Gauus, a techer in the morning, a bishop to hisflock, and a fighter against illegal mining in his spare time. Gauus, 59, lives in North Goa. After his school hours, he moves with a camera to capture every violation of the law by illegal miners. His house is a repository of RTI replies on mining. He doesn’t run any NGO. He doesn’t represent any environmental group. He is a one-man army unleashing himself against the miners (Click here for Gauus’ story).

Abhijit Prabhudesai, 44, is an engineer who was part of the team that planned and executed the Dubai international airport. In 2002, he chucked up his job and returned to his native Goa to spend the rest of his life exploring nature. He found himself fighting the miners instead.

Slideshow of all our images from the Goa mining scam

Adopting a village called Caurem in south Goa, Prabhudesai found himself fighting the illegal miners when they drilled a hole through a hill that supplied water to the village through natural springs. The villagers were up in arms. Prabhudesai galvanised them to gherao the officer con-cerned and didn’t leave his office till he issued orders to stop the drilling (Click here for his story).

Cheryl D’Souza, a 43-year-old widow in Village Maina in south Goa, cremated her husband on her own land in order to deter the illegal miners from taking it over (Click here for full story).

It is from such courageous fighters that Brar needs to get his story of Goa’s illegal mining scandals.

- Raman Kirpal

A bishop who uses his spare time to check-mate minersOn holidays, he is a bishop. In the morning, he is a teacher, taking classes in a rural government school. For the rest of his time, he is a crusader against Goa’s illegal miners.

Ramesh Gauus, 59, lives in north Goa. After school hours, he moves with a camera to capture every violation of the law by miners. In his house is a heap of RTI replies on every aspect of Goan min-ing. He doesn’t run any NGO. He doesn’t represent any environmental group. He is a one-man army unleashing himself against the miners.

Taking a French camera crew to a Bicholi mine last month, he showed them a river, about 50 me-tres away from huge mining dumps. “You check the report of this mine. They have shown in their environmental clearance report that there is no natural water body near the mine site.”

Gauus says not a single mine “complies with environmental rules. These miners are bribing every-one, including the villagers, to keep the truth under cover. They pay Rs 25,000 per annum to farm-ers who have lost their cultivation (rights) due to mining.”

Gauus squarely blames his states’ politi-cians, mainly Chief Minister Digambar Kamat, for the mining scandals.

The French media crew then went with him to one of the mines owned by the Choug-ules. It was a huge crater and the miners had even reached the ground water. They were pumping it out to prepare the pit for further mining.

How are miners mining this land with such impunity?

Says Gauus: “The Portuguese had given land as concessions to some powerful houses during their days. Their writ still rules independent Goa. Chougule is one of the powerful families of Goa. During Portuguese times, it wasn’t scientifi-cally possible to identify areas conducive for mining. The Portuguese thus ended up allotting all the hills and plains of the hinterland of Goa for mining. Goa is only 115 km in its length and width. And the Portuguese gave away 95 km of natural property as concessions to these influential private people. Even those mines, which were dormant during Portuguese times, have begun working on the sly during Kamat’s tenure.”

The mining laws have since been changed, but the strong political nexus and support from CM Kamat ensures that it continues unabated.

There are two recent instances which seal Kamat’s role in supporting illegal mining. “Tribals in vil-lage Caurem met the Chief Minister in February 2011, bringing to his notice that illegal mining was happening in their village. Kamat promised to stop the mining with immediate effect. This, how-ever, didn’t happen. A month later, the tribals sat in a dharna inside the office of the mines director at Panaji. On 1 March they sat till 10.30 pm in the night till the director gave written orders for

closing the illegal mine,” says Gauus.

“Another instance is the mines owned by Zhatiye at Bicholi. The mines have silted the city’s only river beyond doubt. Several representations have been sent to the CM (Digambar Kamat). He even appointed a committee to look into the matter and the committee squarely blamed the mines for the river mess. It was within Kamat’s power to cancel the mining licences, but he didn’t,” Gauus alleges.

Not only the Chief Minister, but some of his ministers are also involved in the mining scandal, claims Gauus. “In Sattari Taluka, north Goa, the local residents forced the police to seize miners’ equipment, machines and trucks from illegal mines. Overnight, the machines disappeared. All the mines that operate in north Goa have the blessings of Health Minister Vishwajeet Rane, who is the only minister from this region.”

If Goa’s illegal mines are ever wound down, it will be because of the untiring efforts of Gauus and others of his ilk.

- Raman Kirpal

She cremated her hubby on her land to thwart Goa’s minersGoa’s illegal miners have been challenged by scores of intrepid citizens. This is the story of Cheryl D’Souza, who has sustained a fight against illegal miners, including a minister in the Digambar Kamat government, for several years now.

Cheryl is a 43-year-old widow in village Maina in south Goa. Eighteen years ago, when she was 25, she had bought a huge tract of land (seven lakh sq metres) to live a rural life. Married to Anthony Sanfrancisco (“Tony” to friends), they made their money in a furniture export business. They lived an ideal rural life till the politicians started coveting their iron-ore-rich land.

As long as Tony was alive, the miners did not harass them, but in 2006 he was electrocuted in an accident. The harassment began soon after.

“When Tony died, it just came full in my face. I had never seen people like these. When good words (to get me to sell the land) didn’t work, the threats started. Joaquim Alemao (Minister for Urban De-velopment) bought two-lakh square metres of land bordering my land from a farmer at throwaway prices. And then he put pressure on me to buy my land.”

But Cheryl refused and faced veiled threats. “When I refused, he turned around and told neighbours: ‘Is this woman mad? I don’t want to do anything to her. She is sitting there with the kid.’”

Cheryl, who lives with her 85-year-old mother Dora and 11-year-old school-going daughter Aki, keeps dogs, including two Rottweilers, to defend her land from attack by the miners.

But her strongest act was her decision to cremate her husband in 2006 close to their farmhouse!

“They (Joaquim Alemao and other miners) did not expect that I would virtually sit (over my hus-band’s body) and say cremate. First, I am Catholic. Second, people are so scared of having this (cremation) done on their own ground. I had taken permission from the Bishop. I categorically asked Joaquim Alemao’s cronies: ‘My husband’s grave is here… My daughter is here… Do you want me to run away?’”

So what did they say to that? “They promised that they would make a beautiful temple on my hus-band’s grave after I sell my farmhouse to them. And they offered Rs 40 crore for my land!”

Cheryl was stunned by the price offer. But then hers is the last bit of green left in her village. “I got several calls threatening gang-rape of my daughter and to kill me. It’s easy for me to take Rs 40 crore and go, but I can’t take away this farmhouse from my daughter. She has associated her fa-ther with the farm. She was six when he died. You can’t take away her father and her home,” says Cheryl.

When Joaquim Alemao began cutting down the trees nearby, Cheryl went from government office to office. Alemao had no permission to cut trees. She managed to stop him.

Then came another miner – Tarcar. His mine is a stone’s throw from Cheryl’s house. She protested along with her mother. Both of them were put in jail on charges of carrying arms. They spent one day in jail. The judge, however, took one look at Cheryl’s 83-year-old mother (in 2008) and mock-ingly asked the police ‘what terrorist are you talking of?’

Cheryl’s furniture export business ended with her husband’s death. She is now into a private job. She doesn’t know how it is going to end. Her daughter is 11 and she may be pushed around for the rest of her life.

“They (the miners) are greedy. They will never give up. But I don’t have a choice,” Cheryl says. She has constructed a 4.5 km long wall around her farmhouse. “These miners call this wall my folly. But I have conveyed to them that we do not sell out our `dead’ cheap,’’ says Cheryl.

- Raman Kirpal

Mother of all mining scams in Odisha: Rs 30,00,00,00,00,000This could be the mother of all mining scams, and this time it’s in Odisha, a State which accounts for over 30 percent of India’s iron ore deposits.

A CNN-IBN investigation has exposed a mining scam estimated at Rs 3 lakh crore, a scale that dwarfs the Bellary mining scam in Karnataka and the Goa mining scam exposed by Firstpost re-cently.

The investigation by Jajati Karan has established that illegal mining flourishes in Odisha’s Keonh-jar distric. Five companies have been charge-sheeted for illegal mining by the Odisha government’s vigilance department. Illegal mining operations in three companies – Serajuddin Mines, Rungta Mines and Indrani Patnaik Mines – were caught on camera by the CNN-IBN team. (Watch the video here)

These were among the 243 mines where work had been suspended after an uproar in the Odisha Assembly in 2009.

Yet, today, the illegal mining contin-ues.

At Balda, at the Serajuddin mines, truckloads of iron ore could be seen emerging from the main gates, all of it mined illegally. Even at night, the CNN-IBN team found trucks leaving loaded with the illegally mined iron ore.

At Unchabali, the CNN-IBN team trekked past pillars marking the Indrani Patnaik Mines to the top of a hill where it caught images of illegal mining at a grand scale.

At Jajang, at the Rungta Mines, the team sneaked a camera in for a few minutes to uncover even more illegal mining.

According to the State Vigilance chargesheet, the illegal iron ore mining at these three mines alone has caused the loss of a staggering Rs 2,352 crore to the state exchequer.

Anup Patnaik, Director, Vigilance, says: “Show cause notices have been served on the owners of all the mines that we are investigating. We have also seized their materials, and told them that mining cannot continue till our case is over.”

Independent estimates have valued the illegally mined iron ore at Rs 3 lakh crore. Each tonne of iron ore fetches the mining company nearly Rs 8,000, while the State government gets a measly royalty of Rs 78 per tonne.

The Mines Department of the Odisha government, however, defends the charge-sheeted mine

owners.

Says Manoj Ahuja, Secretary, Steel and mines: “The royalty has been paid for, so it’s not illegal in that sense. There are no accounts that somebody has done illegal mining.” At worst, it is a violation of a technical norm, he adds.

Last year, the Indian Bureau of Mines issued a show-cause notice to these mines, but took no further action. Till date, 13 minor officials have been arrested, but none of the senior functionaries have been touched.

In April this year, the Odisha High Court finished its hearing over the demand for a CBI inquiry into the mining scam, but reserved its orders. Activists believe that only an independent and im-partial inquiry can reveal the extent of the alleged nexus between mine owners, politicians and bureaucrats

RTI activist Biswajit Mohanty, who has filed a PIL calling for a CBI inquiry into the illegal mining in Odisha, points out that the mining scam was exposed accidentally in 2009, when a ruling BJD MLA asked an innocuous question to the Assembly. The reply exposed the mining scam. (Watch Mohanty’s interview to CNN-IBN here.)

The government was then forced to order an inquiry, and the vigilance department conducted an enquiry. But Mohanty argues that the theVigilance Department is ill-equipped and incompetent to investigate a scam of this magnitude.

“It doesn’t have jurisdiction, it cannot investigate beyond the State’s border”, which he says is criti-cal because even the Central Ministry is involved.”They have to be investigated, and it cannot be done by the Vigilance Department.” In addition, he points out, the case has international ramifica-tions because the ore has been exported to other countries, principally China.

“All of us have challenged this enquiry order on the simple ground that it lacks jurisdiction, it lacks competence, it lacks adequate manpower and infrastructure,” Mohanty adds. “We believe it is a cover-up by the State government to protect the miners and allow illegal mining to continue.”

The scam also highlights the issue of “intergenerational equity” which the Supreme Court has high-lighted in an earlier vedict, Mohanty noted.

“The State and the Centre have to decide how much of mining can be permitted within, say, 25 years or 50 years or 100 years… At the rate at which leases have been given, we don’t expect re-sources to last beyond 25 years. This kind of a policy cannot be permitted,” reasons Mohanty.

Watch video: A debate on what it is about mining scams that cuts across all States and parties.

- FP Staff

Red Earth: How illegal mining devastated Bellary, Ananthapur

How did the illegal mining of iron ore in Karnataka’s Bellary district and neighbouring Anan-thapur district in Andhra Pradesh impact the people involved?

The big beneficiaries were the Gali Reddy brothers, one of whom — Janardhana Reddy — was arrested on Monday by the Central Bureau of Investigation. Before their luck ran out, the Reddy brothers, and others involved in illegal mining, extracted huge profits from their brazen endeav-ours. But there has not been any substantial improvement in the lives of the ordinary people who live in the area.

In the first decade of the new millennium, extraction of iron ore in Bellary and Ananthapur became perhaps even more lucrative than mining for gold or diamonds anywhere in the world.

Bellary contributes roughly a fifth of the entire iron ore that is extracted in India. In recent years, there has been a tremendous surge in mining activities in the region on account of growing de-mand for iron ore from China and also from within India.

Earlier, only iron ore lumps were used, but with the advancement of technology, the demand for iron ore “fines” from India grew exponentially. The prices of iron ore more than trebled between 2000 and 2008 in the world market before declining somewhat. Iron ore prices soared from around Rs 1,200 per tonne in 2002 to around Rs 6,000 per tonne in 2006-07.

India emerged as a large exporter of iron ore after the government opened the mining sector to private investment in 1993. The government subsequently allowed 100 per cent foreign direct in-vestment in the mining of iron ore. At present, India is the third largest exporter of iron ore in the world, of which, one-fifth comes from the mines of Bellary.

The countdown to the August 2008 Beijing Olympics witnessed the commissioning of huge infra-structure projects in China. This led to a hunger for steel in China. The iron ore found in Bellary is of a superior quality, one of the finest in the world, with an iron (Fe) content of 60-65 per cent. It is known as 64Fe. This ore is exported in its raw form to not only China but also to countries like Japan and South Korea where it is converted into pig iron and then finished steel.

The district of Bellary accounts for around 80 percent of the total iron ore reserves in Karnataka. According to official records, the district has 99 iron ore mines, of which 58 are functioning.

However, the ground reality is quite different – there have been as many as 12,000 cases of alleged illegal mining since 2000. According to the Union Ministry of Mines in New Delhi, of the 95 iron ore mines in the Bellary-Hospet area, the Indian Bureau of Mines (IBM) inspected 93 mines (there are legal disputes relating to two mines) and found that there were violations of rules in as many as 89 mines.

The Bureau – with the assistance of multi-disciplinary teams from the Indian Space Research Organisation, the National Remote Sensing agency and the Geological Survey of India — recom-mended that mining be suspended in 30 mines while show-cause notices were served on the other 63 mines.

According to data available for the year 2005 and 2006, the government earned a relative-ly small sum of Rs 80 crore as royalty from the sale of iron ore in those two years. While the state government earned a measly sum of royalty to the tune of Rs 27 for each tonne of iron ore mined, mining leaseholders made huge profits by exporting the same tonne of ore at prices upwards of Rs 6,000 per tonne.

On 16 July 2010, the then Chief Minister of Karnataka, BS Yeddyurappa, acknowledged in the state assembly that over 30 million tonnes of iron ore had been illegally exported

from Karnataka over a seven-year period between April 2003 and March 2010. The total worth of this huge quantity of iron ore would be at least $1.5 billion, or Rs 7,500 crore (assuming very con-servatively that each tonne of iron ore was worth $50 in the international market).

The then Chief Minister contended that out of the 30 million tonnes illegally exported, only around 10.5 million tonnes of iron ore had been illegally exported out of the state during the first two years of his term.

As per the calculations of the former Lokayukta (Santosh Hegde), the cost of excavating a tonne of iron ore is about Rs150 per tonne. Transporting it to a seaport costs another Rs 150 per tonne at the most. These two components are legitimate expenses which add up to around Rs 300 a tonne. While transporting iron ore to a port, trucks are invariably overloaded. A single rear-axle truck with a loadable capacity of 15 tonnes often carries a load of up to 25 tonnes, while a double rear-axle vehicle with a loadable capacity of 25 tonnes is often overloaded and carries twice as much.

Trips from the mines to the ports are made rapidly to transfer as much of the ore as possible in as little time as possible. While making several trips to the port and back to the mines, each truck traverses a distance of around 600 km in less than 24 hours.

In order to bypass laws and rules, it is estimated that around Rs 200 is paid as bribe per truck to officials of the state government (from the Transport Department) and the customs department (of the Union or federal government). Thus, according to the Lokayukta’s calculations, the total ex-penses incurred on every truckload of iron ore varies between Rs 500 and Rs 600 a tonne.

Thus, on an investment of Rs 500-600 for extracting and transporting one metric tonne of iron ore, mine-owners have been earning windfall profits of between Rs 5,500 and Rs 6,500 a tonne. Keeping these calculations in mind, it has been estimated that with more than 10,000 trucks making the rounds every day, mine-owners in Bellary, legally and illegally, had been raking in an amount varying between Rs 12 crore and Rs 20 crore each day!

Iron ore mined from Bellary and Ananthapur is exported not only through ports like Mangalore, Karwar and Belekeri (in Karnataka), but also through Krishnapatnam, Visakhapatnam and Kaki-nada (in Andhra Pradesh), Chennai (in Tamil Nadu) and Mormugao (in Goa).

Even as India intends increasing its domestic steel production substantially, many apprehend that much of the country’s good quality iron ore has already been sent out of the country. For years now, there have heated debates in India on whether exports of iron ore should be banned or whether a stiff duty should be levied on exports. In early- and mid-July 2010, as the Opposition in the Karnataka assembly mounted demands for the resignation of the Reddy brothers from their ministerial positions, the state government banned all exports of iron ore.

According to the Lokayukta, had proper norms and procedures related to iron ore mining been fol-lowed and the guidelines laid down by the Indian Bureau of Mines (IBM) been adhered to in letter and spirit, iron ore reserves in the region would have lasted between 25 years and 30 years. How-ever, since private mine-owners have violated all norms while extracting iron ore with the help of modern excavation equipment, geologists have claimed in 2010 that the entire iron ore reserves of the Bellary-Ananthapur region would get exhausted over the coming five to eight years.

The mining town of Bellary, which has a population of around two million, boasts of a per capita income which is in excess of Rs 47,000 and is well above the average per capita income of Karna-taka (around Rs 41,000). However, the literacy rate of the town, at 57 percent, stands well below the average literacy rate of Karnataka (around 67 percent).

Large-scale illegal iron ore mining has resulted in sharp economic polarisation by concentrating wealth in the hands of a few while pauperising and impoverishing a large section of the local popu-lation, depriving them even of their basic human rights and contributing to the widespread pollu-tion of their air and water.

Iron ore mining has resulted in the creation of a nouveau riche class in the region. This can be gauged from the fact that luxury carmaker Mercedes Benz sold at least 25 vehicles to mining ty-coons in Bellary over 2008 and 2009. Its rival company BMW has plans for setting up a satellite dealership in the nearby town of Hospet while Honda Siel Cars India Ltd has expressed its inten-tion to set up a showroom in Bellary.

According to one estimate, prior to 2007, Bellary was the emerging private aircraft capital of India because it accounted for almost 10 per cent of the all-India market for private flying machines. As many as eight private aircraft, including two Bell helicopters, are owned by residents of Bellary. Two more private aircraft and two choppers joined the fleet in 2007-08. Mine owners like the Lad brothers, the Reddy brothers, the Baldota family of MSPL and firms like Bellary Iron Ores and Hothur Iron Ore are some of the prized owners of private aircraft in Bellary.

Large sections of the people of the district, on the other hand, continue to live in abject poverty.

According to the Karnataka Human Development Report of 2005, Bellary ranked 18th among 27 districts in the state. The report added that Bellary was placed the lowest among all the districts in the state in terms of social indicators such as literacy, health and access to drinking water.

The report pointed out that even though the district is 9th in terms of income among all the dis-tricts of Karnataka, “higher income does not automatically translate into an improved literacy and health status for the people if that income is not equally distributed”.

Mining has also had its impact on employment patterns. Earlier, agriculture used to be the prima-ry occupation for the people, but many farmers have leased out their lands for mining of iron ore. Karnataka is among the states in India that engages women in large numbers in mining. Women are mainly involved in activities like loading, unloading and stone crushing. Women work for long hours in pitiable conditions (sometimes even when they are in advanced stages of pregnancy) and for wages that are far lower than those paid to men.

Children as young as three years of age are engaged in activities like hammering, crushing and fill-ing boxes with iron ore, again at abysmally low wages, in clear violation of the laws of the land. Far from getting decent education and health facilities, these children are exposed to serious health hazards from inhaling air with high proportions of suspended particulate matter and are also prone to accidents.

Mining in Bellary has adversely affected the environment in the region. A study by the National Environmental Engineering Research Institute (Neeri) found that suspended air particles at many locations in the district were far above the national health standards. According to Neeri’s report, the dust hanging in the air of Bellary due to rampant mining is a serious health hazard.

The area has high incidence of lung infections, heart ailments and cancer. However, the Karnataka State Pollution Control Board (KSPCB) has been tardy in issuing notices to mine-owners under existing laws (including the Air Act, 1981 and the Water Act, 1974).

Mining has had adversely impacted the forest areas, including the ‘reserved’ forest areas, in Bellary and Vyasankere. Dumping of waste material has caused erosion of the topsoil of the region. Spe-cies of wildlife such as the as the Egyptian vulture, yellow throated bulbul, white backed vulture and four-horned antelopes have vanished due to depletion in the forest cover on account of min-ing.

Rainwater that used to earlier flow down hillocks and replenish underground aquifers now picks dust along the way, contaminating water and degrading soil, making farming difficult. Studies point towards a fast rate of siltation in the Tungabhadra reservoir due to the deposition of waste material generated from mining.

A 2005 study by the Jagratha Nayaka Balaga, an NGO based in Bellary, says the total capacity of the reservoir has come down from about 133 thousand million cubic metres (tmc) to 99 tmc in recent years. This depletion in the water level in the reservoir has threatened aquatic life and constrained irrigation for agriculture. The fact that some 7,500 trucks carrying heavy loads of iron ore (often far above the permissible limit of 15 tonnes per truck) move out of Bellary every day has damaged long stretches of roads and added to atmospheric pollution.

- Paranjoy Guha Thakurta

How the Gali Reddy brothers ruled Bellary with iron handWhat former Karnataka Lokayukta, Justice Santosh Hegde’s final report on illegal mining has meticulously documented is how the Gali Reddy brothers have used their power and pelf to run the administration and subvert the rule of law.

When they ruled the roost in iron ore rich Bellary district, honest officers have been transferred and any person who dared criticise them has been sought to be ruthlessly suppressed. Despite charges of physical violence and a number of non-bailable criminal cases pending against them, the Gali Reddy brothers and their associates have operated with impunity.

One of the brothers, Janardhana Reddy, a former minister in the BS Yeddyurappa government, was arrested by the Central Bureau of Investigation on Monday along with his brother-in-law B V Sreenivas Reddy. (Read how their luck ran out)

Among those who dared to defy their writ and were consequently brutalised were a former em-ployee turned whistle-blower V Anjaneya and rival mine-owner Tapal Ganesh.

A former deputy general manager with Obalapuram Mining Company (OMC) con-trolled by the Reddy brothers, Anjaneya, who had overseen the destruction of state boundary markers between Karnataka and Andhra Pradesh, allegedly at the insistence of his superiors in the company, became a whistle-blower and divulged crucial infor-mation to the CBI.

Anjaneya’s makeshift office in the mines of Bellary was destroyed by goons in antici-pation of a CBI raid. The Reddy brothers hounded Anjaneya, who, together with his family members, went into hiding in

Bangalore. He claimed he had attempted suicide because of the torture that had been inflicted on him by certain officers and employees of OMC.

Anjaneya lodged a complaint on 30 December 2009 with the State Human Rights Commission (SHRC) of Karnataka against the management of OMC and against the police in Bellary. The SHRC recorded Anjaneya’s statement on oath on the last day of December at a hospital in Bangalore.

The SHRC passed an order the following day holding police officers in Bellary and particular em-ployees of OMC guilty of having committed serious and heinous violations of the human rights of the complainant and his family members. The Commission passed its order on the state govern-ment so that the investigation of all criminal cases and counter-criminal cases arising out of the episode were transferred from the Cowl Bazar police station in Bellary to the state government’s corps of detectives (COD).

The SHRC also directed that the Superintendent of Police, Bellary, be transferred and that ade-quate security be provided to the complainant and his family members while the cases being inves-tigated. The state government, however, did not act.

On 29 March 2010, Tapal Ganesh of TNR Mining Company, a rival of OMC, was beaten up by goons in Bellary when he was trying to assist a team from the Union government’s Survey of India to help determine the extent of encroachment upon reserved forest areas by OMC and to verify allegations that the boundaries between the states of Karnataka and Andhra Pradesh had been deliberately destroyed.

Ganesh alleges that the goons attacked him at the instance of Janardhana Reddy. Ganesh is a peti-tioner against the Reddys in both the High Courts of Karnataka and Andhra Pradesh as well as the Supreme Court. He was given police protection only after the personal intervention of HD Deve Gowda, Janata Dal (Secular) head and former Prime Minister, after Ganesh desperately called up Deve Gowda seeking his help.

In June 2009, the Gali Reddy brothers spent over Rs 40 crore on gifting a diamond-studded crown to the Tirupati temple. But they were also instrumental in destroying another temple because it came in the way of their illegal mining actitivies.

It has been contended that individuals close to Janardhana Reddy were responsible for the de-struction of the 200-year-old Sugalamma Devi temple located in the mining lease area of OMC – while mines were being exploded. In September 2006, a case against the Reddy brothers was dropped despite objections from the police and the law department in the state.

How did the Reddy brothers from Bellary, the sons of a police constable, become so wealthy and politically powerful? Did ordinary people benefit from their activities? How did they successfully subvert the system of administration or governance and even the judiciary? Is the power of money so pervasive? How did the loot from Bellary and Ananthapur covertly fund two of the largest politi-cal parties in India?

Will the allegations against the Gali Reddy brothers against them be proved in a court of law? Will they be punished for their alleged misdemeanours?

The truth about their activities is slowly but surely coming out. The wheel has turned full circle for Gali Janardhana Reddy. Few believe his claim that he is as “pure as 24-carat gold”, as pure as the gold seized from his home by the CBI last Monday.

(The writer is an independent educator and journalist based in Delhi whose work cuts across different media – print, radio, television, documentary cinema and the Internet. He recently pro-duced and directed “Blood & Iron”, a documentary film series on iron ore mining in Bellary and the convergence of crime, business and politics in southern India.)

- Paranjoy Guha Thakurta

How luck ran out for illegal mining king Janardhana ReddyThe arrest on Monday (5 September 2011) by the Central Bureau of Investigation (CBI) of the kingpin of illegal iron ore mining in Karnataka and Andhra Pradesh, Gali Janardhana Reddy, former Minister for Tourism, Youth Affairs and Infrastructure Development in the BS Yeddyurap-pa government, has not come a day too soon. His brother-in-law BV Sreenivas Reddy, who is man-aging director of Obulapuram Mining Company (OMC), a firm controlled by Janardhana Reddy, his brothers and associates, was also arrested.

The arrest comes almost 21 months after a first information report against the company had been lodged by the CBI in December 2009, and testifies to the political clout of the Reddy brothers in both the states.

In fact, Janardhana Reddy, who continues to protest his innocence, had been given more than am-ple opportunity to remove evidence, cover his tracks and wipe clean any fingerprints that existed. Which is why it is rather surprising that the CBI still managed to reportedly seize more than 30 kg of gold and over Rs 1.5 crore in cash from the premises of the former minister. The only explana-tion for the seizures could be that the greed of the former minister and his family members knew no bounds.

The time was politically opportune for the arrest. The promoters of privately-owned mining companies in Bellary in Karnataka and in the adjoining Ananthapur district in Andhra Pradesh, who used to fund the activities of political leaders in the past, had become important politicians themselves and, what is more, bankrolled important leaders belonging to the two largest political parties in the country, the Bharatiya Janata Party and the Indian National Congress.

Despite his denials, the proximity of Janard-hana Reddy to YS Jaganmohan (‘Jagan’)

Reddy— member of Parliament from the Kadapa Lok Sabha constituency in Andhra Pradesh, the richest MP according to his declared assets, and son of the late YS Rajasekhara Reddy, former Chief Minister of Andhra Pradesh—is hardly a secret. Associates of Jagan Reddy and Janardhana Reddy also have business links through a company called Red Gold, which is associated with OMC.

By June this year, the writing on the wall was clear. It became apparent that the ground was slip-ping under the feet of the notorious Gali Reddy brothers, the principal protagonists responsible for large-scale illegal mining of iron ore in Karnataka and Andhra Pradesh, which is largely exported to China.

Their mentors were deserting them. Sushma Swaraj, Leader of the Opposition in the Lok Sabha, had, in an interview to Outlook weekly on 6 June, sought to distance herself from the brothers and claimed that their rise was on account of their proximity to former chief minister Yeddyurapa

and the support given to them by Arun Jaitley, Swaraj’s counterpart in the Rajya Sabha, and per-ceived as her rival in the party.

On 27 July, a few days before he retired, Justice N Santosh Hegde, the then Lokayukta (or people’s ombudsman) of Karnataka, presented his final report on illegal mining in Bellary which raised a political storm, not just in the state but in the entire country. The detailed document sought to in-dict Janardhana Reddy, and refuted his contention that he was not involved in illegal mining in the state. It also alleged that he had laundered money through international tax havens.

On 4 August, DV Sadananda Gowda was sworn in as the new Chief Minister of Karnataka and when he constituted his cabinet he not only dropped Janardhana Reddy as minister but his broth-er Gali Karunakara Reddy, who was Revenue Minister, and the “fourth” of the Gali Reddy broth-ers, B. Sreeramulu (who was Health Minister, who is a close associate of the Gali Reddy brothers and belonged to the backward Valmiki community) as well. (The least controversial of the three brothers, Gali Somasekhara Reddy, continues as president of the Karnataka Milk Federation.)

Like former chief minister Yeddyurappa, the Gali Reddy brothers came from a humble background and then became fabulously rich. The father of the three Gali Reddy brothers served as a police constable in Cowl Bazar in Bellary. The brothers had started a chit fund business which went un-der.

Bellary has not only been an important arena of state politics but of national-level politics as well. Important politicians who have chosen to contest parliamentary elections from the constituency include Sushma Swaraj and Sonia Gandhi. The two women had contested elections to the parlia-mentary constituency of Bellary in 1999, which was won by Sonia Gandhi.

All subsequent (national and state) elections were won by BJP candidates as Bellary ceased to re-main a “stronghold” of the Congress party – which it earlier used to be.

For years, it seemed that the Gali Reddy brothers were invincible, that they would never be arrest-ed or apprehended. The political influence of the brothers did not diminish despite allegations—by the Supreme Court-appointed Central Empowered Committee (CEC) besides the Lokayukta—to the effect that state boundaries had been trespassed and that forest laws had been violated during mining operations.

The Reddy brothers and their associates brazenly denied (and continue to deny) these allegations and claim that they do not control any mining leases in Karnataka, even though the brothers and their associates control OMC in neighbouring Andhra Pradesh.

It has been alleged that the Reddy brothers control mining operations in Karnataka through illegal third party links, including “raising contracts” through which their associates extract iron ore out of areas that have been officially leased to other individuals and firms.

Reports prepared by the Indian Bureau of Mines (IBM) under the Union government’s Ministry of Mines as well as by Justice Hegde have indicted the manner in which iron ore mining has taken place in the area in blatant violation of the laws of the land, thereby destroying the livelihoods of local people, degrading the environment in which they live and quickly depleting mineral reserves in a rapacious and unscientific manner.

In November 2009, after the then Chief Minister Yeddyurappa decided to call for a ‘contribution’ of Rs 1,000 from the owners of each truck carrying iron ore out of Bellary for those affected by floods in the state, the Reddy brothers displayed their clout by precipitating a political crisis that

threatened the continuance of the state government. The crisis was resolved only after the BJP leadership in New Delhi intervened and after the then chief minister removed one of his ministe-rial confidantes (Shobha Karandlaje, former minister for Rural Development and Panchayati Raj) and transferred key government officials.

Soon after K Rosaiah became Chief Minister of Andhra Pradesh in September 2009 after YSR’s untimely death in a helicopter crash (the Congress ‘high command’ ignored his son Jaganmohan Reddy’s aspirations to hold the position) Rosaiah announced that the CBI would inquire into al-legations of violations of laws by OMC.

Even as legislators were preoccupied with the agitation for a separate state of Telengana carved out of Andhra Pradesh in the second week of December 2009, the CBI conducted search-and-seizure raids on the homes of (and offices controlled by) the Gali Reddy brothers.

The brothers have also been accused of influencing the judiciary. In December 2009, a letter sent by a non-government organisation, the Campaign for Judicial Accountability and Reform (CJAR), to representatives of major political parties seeking their support for impeaching controversial Justice PD Dinakaran, former Chief Justice of the Karnataka High Court, claimed that the judge “has played a major role in helping the mining mafia of the Reddy brothers to continue with ram-pant illegal mining”.

On 9 July 2010, the Karnataka High Court issued an interim order directing the customs authori-ties to stop all exports of iron ore by 10 private companies from the ports of Mangalore, Karwar and Belekeri in the state, till an investigation was completed into the disappearance of 500,000 tonnes of iron ore – out of the 700,000 tonnes of ore that were seized in March 2010 at the in-stance of the then Lokayukta, Justice Hegde.

The ore was transported to the Belekeri port in an allegedly unauthorised manner. Ministers in the Karnataka state government offered unconvincing reasons for the disappearance of the iron ore.

Ten companies had filed a batch of writ petitions in the high court in April 2010 seeking the release of iron ore which had been seized during the raids conducted by government officials on the direc-tions of the Lokayukta. The Deputy Conservator of Forests, Karwar, R Gokul, had appealed to the high court in June 2010 to direct the Commissioner of Customs, Mangalore, not to allow export of iron ore from ports in the state.

Subsequently, Gokul was sought to be suspended from his post by the Karnataka government’s Minister for Ports. This led to Justice Hegde resigning his position on 23 June 2010. He withdrew his resignation a fortnight later after the intervention of, among others, senior BJP leader and former Deputy Prime Minister LK Advani.

On 28 June 2010, the Election Commission issued notices to Karnataka ministers Karunakara Reddy, Janardhana Reddy and Sreeramulu on a complaint by Congress legislator KC Kondaiah, seeking their disqualification for using “political positions to further their business interests”. Kondaiah sent the complaint to Karnataka Governor Hans Raj Bhardwaj.

When the Governor summoned the ministers, they questioned his authority “to act like a court of law”. The Governor then forwarded the complaint to the Election Commission who asked the min-isters to respond to the allegation that they are holding offices of profit. The BJP responded to Gov-ernor Bhardwaj’s public call for the resignations of the ministers by describing him as an “agent” of the Congress.

In July, 45 MLAs belonging to the opposition Congress party in Karnataka staged a protest inside the state legislative assembly and refused to vacate the premises even at night, demanding a CBI probe into illegal iron ore mining in the state. Yeddyurappa and two of the Reddy brothers came to Delhi on 18 July, met important functionaries in the government and in the BJP.

Thereafter, they stated that there was no evidence on record to indicate the involvement of the Reddy brothers in illegal mining, that they had not misused their public positions to earn personal profits and that they were completely innocent.

Janardhana Reddy claimed he was as “pure as 24-carat gold”. He counter-alleged that the charges against him, his brothers and their associates were drummed up by their political opponents and business rivals. Yeddyurappa also ruled out a CBI inquiry into the allegations of illegal mining in the state while suggesting that exports of iron ore be banned.

With Yeddyurappa out of the way, the CBI has now moved in to finish the job.

- Paranjoy Guha Thakurta

Bellary’s dirty secret: Child la-bour in mines, but no actionWith the focus of the Bellary illegal mining scam shifting to the Gali Reddy brothers after the exit of BS Yeddyurappa as Chief Minister and the arrest of Janardhana Reddy, the Karnataka govern-ment has lost track of something even more important: the use of child labour in these.

In all, some 356 children working in the Bellary mines were reportedly rescued, but they have not been compensated and rehabilitated. Worse, the state government’s shoddy investigations led to the acquittal of 93 miners of criminal charges under the Child Labour Act.

The Karnataka government had identified 123 miners, who had employed 167 children, and initi-ated criminal proceedings against them. Only nine miners were convicted and as many as 93 were acquitted because the concerned officials forgot to conduct x-ray tests of the rescued children to ascertain their age.

Doctors had carried out clinical tests, but these are inadequate to prove the age of a child. In most cases, the government could not even establish the identities of the miners who employed children below 14 years.

On several occasions, the state govern-ment was provided with a list of children working in the Bellary mines. The district authorities had given a list of 167 children. The Project Director of the National Child Labour Project (NCLP), Bellary, had given another list of 129 children working in ‘float’ iron ore mines. The National

Human Rights Commission (NHRC) gave a third list of 51 children (and then nine more) working in float ore mines of the Bellary-Hospet region.

Where are these children now? Till August 2011, the NHRC was struggling to find an answer and is waiting for the Karnataka government to give it information on the well-being of these children and their education status. It is not known if the Karnataka government has provided financial as-sistance to the families of the children and whether it took punitive action against the miners, who exposed children below 14 to mine dust.

The NHRC had sent fact-finding teams on several occasions and they reportedly found that many rescued children were back at work in these mines. The team also found some children working in granite processing units in Bagalkot district, where children were employed to collect kerosene from the slush.

Under the law, anyone employing child labour in mines has to pay Rs 20,000 for every rescued child. Plus, the state government is expected to contribute Rs 5,000 for each rescued child in the rehabilitation fund. But the state government has reportedly failed to recover Rs 20,000 from the concerned employer.

In its reply to the NHRC, the state government claimed that in most cases, its officials could not collect details of the employers. The government had recovered Rs 20,000 in the cases of seven rescued children and 159 such `recovery’ cases were pending.

Calling the state government ‘lethargic’, the NHRC expresses surprise how the labour department could term these children as “potential labour” when these children were found working with their parents in float ore mines. Not only this, the NHRC has been doggedly pursuing cases of child la-bour in Bellary’s mines since 2005-2006.

The state government is either evasive or making `generic’ claims that the rehabilitation process is on, sources in NHRC told Firstpost. In June 2011, NHRC again asked for an action taken report from the state government. The report is awaited.

- Raman Kirpal

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