A Political Minefield

The battle for the control of Bellary's iron ore spills into the open after a mining magnate alleges attack by rivals

SANJANA
Bangalore

ONE PLACE to lay the blame for the political skulduggery in Karnataka’s Bellary district could be at China’s door. The discovery of a bustling market for iron ore fines from Bellary in India’s big neighbour has partly heightened the pitched battle between mining magnates seeking party nominations since 2002.

Slated for polls in the second phase on May 16, Bellary has nine constituencies — seven of which, following delimitation, are reserved seats. Despite this significant change, five candidates are mine owners or head of mining corporations. The Congress candidate from Bellary City, Anil Lad, is the managing director of VS Lad & Sons while his BJP rival Somashekhar Reddy is the director of the Obalapuram Mining Company. Another director of Obalapuram Mining, B. Sriramulu, is contesting on a BJP ticket from Bellary. The BJP’s Vijayanagar candidate Anand Singh is the managing director of Vaishnavi Minerals and his Congress rival, HR Gaviyappa, is a mine owner from Hospet (a town 60 km west of Bellary and home to several mining corporation offices). Barring Anand Singh, all other candidates have successfully contested elections earlier from different political parties.

The district is in the news following the torching of Anil Lad’s three cars on April 18. Lad, whose house was also attacked, believes the assault was carried out by his rivals B. Sriramalu and the Reddy brothers, to dissuade him from contesting elections. Lad, a former MLA from Kudligi constituency in the district, says, “Sriramalu left my house just five minutes before the attack took place. He threatened me of dire consequences if I didn’t leave Bellary. He said Bellary belonged to the BJP and that he would chase me out if I didn’t leave voluntarily.”

Lad’s claim is rejected by Janardhan Reddy, Somashekhar’s brother and a close confidante of Sriramalu. “This is an attack that the Congress itself carried out to gain publicity, as Lad is contesting for the first time from Bellary City,” says Reddy. But despite his denial, the Reddys have gained notoriety over the years that is difficult to shake off. They shot into the limelight in 1999, when Sushma Swaraj and Sonia Gandhi decided to contest the Bellary Lok Sabha seat. Though the BJP lost, Sushma Swaraj’s presence ensured the BJP made serious inroads. “Though people knew Sriramalu, it was only in 1999 that people started taking the BJP seriously. We broke the Congress stronghold over this district and there has been no looking back since then,” says Reddy. Others outside the BJP circle agree that the 1999 Lok Sabha elections were pivotal; since then, the Reddy brothers — Janardhan, Karunakara and Somashekhar — have treated Bellary as their fiefdom. “Look at their gains since 1999 — Karunakara as MP, Somashekhar as MLA and Janardhan as MLC. Their combined assets are worth over Rs 400 crore. People vote for them out of fear and greed,” says a political observer.

Like its politics, competition for mining in Bellary is bitter. The demand for iron ore in China has surged in the past six years, leading to a boom in the mining sector. New money is conspicuous. Apart from the slew of SUVs running riot on the streets of Bellary and Hospet, mine owners use private aircraft to shuttle between their farmhouses, offices and electoral constituencies. Several mine owners, including Lad, the Reddy brothers, the Baldotas, the Jindals and the Modis, own a fleet of choppers and aircraft. Their airstrips are even leased out to aviation companies.

“To even begin answering the question of how much of the mining is legal and how much illegal, is a difficult proposition. We need to take on board the different shades of illegality that exist,” says GN Thippeswamy, general manager, MMTC Ltd. Prior to the opening up of India’s export licence market, MMTC was the sole agency exporting iron ore.

“If a mine owner is granted permission to mine, say five hectares, you can be assured that the mining will never begin from the centre of the permitted area. It will always start from the boundary, and it is there that the process of encroachment begins. You have to take into account the fact that mine owners invariably mine beyond the permitted quantity limit. The local RTO offices responsible for weighing the lorries that transport iron ore fines are either understaffed or look the other way,” Thippeswamy explains.

OFFICIALLY, 59 leases have been granted by the state Department of Mines and Geology in Bellary district; a number that the officials themselves agree is far less than the actual mines in operation. “Does it surprise you or anyone that the people who are involved in illegal mining are invariably politicians? How else have they been able to get by all these years? If I am pushed to give you an estimate of the money involved, I would say at least Rs 2,000 crore in black money annually,” says a senior official at the Mines and Geology Department.

The estimate may not be off the mark. According to the Indian Bureau of Mines, India’s total iron ore production in March 2006 stood at nearly 1.55 lakh tonnes and was valued at Rs 8,600 crore. Karnataka’s annual contribution is pegged at 21 percent of the total production, which is slightly more than Rs 1,800 crore.

In July 2006, the question of illegal mining shook the then HD Kumaraswamy government when Janardhan Reddy claimed that the CM and his associates had collected Rs 150 crore so that illegal mining could continue. A Commission of Inquiry instituted at the time was given six months to file its report. But its head, UL Bhat, resigned when the government failed to extend its term and the Commission was wound up. The case was then handed over to the Lokayukta, the anti-corruption cell of the government. “Pending the completion of elections, we have stopped the inquiry. The final report will be published once Justice Santosh Hegde, the Lokayukta chief, completes the process,” says Lokayukta registrar L. Subramanya.

For now, the focus will remain on whether the Election Commission is able to clamp down on violations of the model code of conduct. Taking on a mining lobby that is steeped in money and has enjoyed political patronage all these years will be no mean task.

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sanjana@tehelka.com