Leave iron ore in Karnataka: SC tells Vedanta group

ironoreBengaluru, Sept 1: The Supreme Court on Thursday refused permission to Vedanta Group to export iron ore mined from Karnataka.
The court, however, allowed the National Mineral Development Corporation (NMDC) to continue with the dual pricing of the minerals. The court rejected the prayer made by the Vedanta group to refer the matter to the High Court for adjudication.

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How the OMC operated in Kar-AP

The noose has finally come around the neck of Janardhan Reddy who was arrested by the Central Bureau of Investigation today. The entire issue today is the Obulapuram Mining Company, the lease for which was granted to the Reddy brothers of Bellary by the Andhra Pradesh government under the leadership of Dr Y S Rajasekara Reddy.

The allegation is that despite the lease being granted in Andhra Pradesh Janardhan Reddy had used this licence to carry out illegal mining in Bellary which is in Karnataka.

The Obulapuram Mining Company story:

Obulapuram Mining Company Private Limited (OMC), Ennoble House, Raghavachari Road, Bellary. Directors- G. Janardhana Reddy, G. Lakshmi Aruna, G. Karunakara Reddy, D. Parameshwara Reddy,B. Sree Ramulu.

The allegation as per reports is that the OMC a very big exporter of irone ore with a mining lease from Andhra Pradesh have exported iron ore of Karnataka origin. However when records are verified there is no record to show that permits were issued to OMC from the Director of Mines & Geology, Karnataka.

Further the allegation is that the total exports of iron ore of Karnataka origin by OMC during 2006-07 to 2010-11 is 71,61,455 MT, which includes 21,44,789 MT from Chennai Port. The total exports of iron ore of AP origin by OMC from Chennai between 2006-07 and 2010 (till Dec) 2,17,660 MT only.

Further the allegation is that fake permits were used to transport ore illegally out of Karnataka in the name of a lease which had emerged from Andhra Pradesh. The Lokayukta who submitted his report on this issue recently also goes into the issue while stating the following. Investigations conducted have revealed that forged and fake permits purportedly issued by the Mines and Geology department of Andhra Pradesh were used for illegal transport of theft iron ore from Hospet, Sandur Bellary and other taluks. Use of such permits was the main reasons for illegal iron ore transport in the BHS region and also from the surrounding districts. There is indication of an unholy nexus of fake and forged permits obtained and used for illegal transport of iron ore mainly illegally extracted from the various places like forest land, Revenue land and also from regular leases i.e., excess quantity than permitted in Karnataka. Rs. 1,11,13,394/- have been paid for procuring such permits. A person by name Sajjan of Hospet was used as agent for this purpose. The other persons involved are Yeriswamy, Mahesh, Ramu, Waheed and others. The forged permits were used for transporting iron ore to various destinations like Belekeri, Karwar, Goa, Krishnapatnam, Chennai, Mangalore and steel units inside and outside the State.

Further the CBI is also dealing with the under invoicing during the export of ore. The total under invoicing in US $ and INR comes to $52,341,292.00 corresponding to Rs.215,12,50,387.00.

The foreign exchange involved in this case, has not come to Union of India and indicates that this amount might have been parked in some Banks in Tax Heaven countries and the amount is estimated to be Rs.215,12,50,357.00 which should have been profit of the Government from OMC.

The modus operandi to carry out such an operation is also interestng

There is a well established forest check post at interstate border near Bellary (Hagari check post). This check post was withdrawn by the then Deputy Conservator of Forests, S.Muthaiya in 2008. From the records seized from Belekeri port, large numbers of forged permits were found purportedly issued from Andhra Pradesh. With this act of withdrawal of established check post, it is quite clear that Andhra Pradesh origin Xerox copy of bulk permits and forged trip sheets were in use at a large extent to illegal transport of iron ore from the illegal stockyards, permitted stockyards, Forest and Revenue areas and also from regular leases.

One of the main reasons for explosive illegal iron ore mining during 2009-2010 was posting of favored officials at strategic posts of Police, Mines, Forest, Revenue and other departments. Because of this, a fearless atmosphere prevailed in the Bellary district. Law of the land was seemed to have been suspended and oral whip was used to keep silent. Consequently administration has allowed to loot the natural resources, in this case the iron ore, which continued without any opposition. Huge bribes were paid. Mafia type operations were the routine practices of the day.

It is to be noted that during late 2009, State Government tried to post some upright and officers with known integrity in Revenue, Forest and other departments. Unfortunately, for reasons known to the Government, they were transferred in a fortnight and the same old officers were reposted. This act of withdrawal has further fuelled the corruption to raise its head and it has became a monster, uncontrolled as reflected in the seized documents.

A well equipped intelligence networking was deployed by the “Bosses” involved in illegal operations where their people were placed at strategic places all along the major routes to Krishnapatnam, Belekeri, Karwar and others ports. The trusted personnel’s were deployed/posted with motorbikes, mobile phones and money. Rooms were taken on rent on routes to stay and watch. A parallel administration was in position and operation. Regular payments were made to such deployed personnel’s as seen in the seized records. The Government machinery/ administration was totally paralyzed.

Records of Income Tax Department, show that several entries of payment of penalties against the illegal transport of theft iron ore (in Karnataka, Andhra Pradesh and others) have been recorded during the period on various dates. The payment of penalty is a proof of illegal transportation and theft of iron ore. It also proves that concerned people are taking the responsibility for transportation illegal iron ore by collecting “risk amount” by Sri K Mahesh and his associates. With the records and field observations it is found for the last 5 months, that the risk amount had been collected at the rate of Rs. 75 to Rs. 200 per MT based on the risk involved, distance, State and the relationship with the party. In the five months period Rs. 40,92,88,860/- of risk amount was collected and by dividing this amount to an average of Rs.125 per Metric Tonnes it comes out 3274310.88 MT illegally transported in this period.

SC allows iron ore mining in Bellary by NDMC ‎

The Supreme Court in an interim order while keeping in mind the demand for iron ore has permitted the state run NMDC to operate two mines in Bellary district.
The NMDC which has been granted leases by the state and also which finds a mention in the Lokayukta report pertaining to lease violations was today permitted by the Suprme Court to extend the production of iron ore to the tune of one million tonnes per month from tomorrow onwards.
The Special forest Bench headed by Chief Justice S H Kapadia while passing this interim order however maintained that this order does not apply to private owners and the ban on mining in respect to them shall continue.
The interim order also states that while mining would be permitted for the NMDC, no part of the ore shall be exported. Further the Bench also directed the Karnataka government to levy royalty of 10 percent of the value of the iron ore.
The Supreme Court also directed a macro level environment impact assessment  be undertaken by Indian Council of Forestry Research and Education and directed that the report be submitted in three months. In addition to this it also sought details about the rehabiltation package for Bellary in three months.

CBI probe- the Supreme court also adjourned hearing on an interlocutary application seeking a CBI or SIT probe into illegal mining in Karnataka. Senior Counsel Prashanth Bhushan said that the application while seeking a CBI or SIT probe also takes note of the latest Lokayukta report. The matter is expected to be heard next week.