The landscape of illegal mining in Karnataka that emerges from the final report on illegal mining submitted by Lokayukta N. Santosh Hegde is vast and murky. The 465-page core report, in 33 chapters, reveals the many facets and dimensions of illegal mining in the State between 2006 and 2010.
It cost the State exchequer Rs. 16,085 crore; it drew into its ambit Chief Ministers, Ministers, officials and businessmen; it made billionaires of some even as it impoverished thousands; and it caused incalculable damage to the environment.
The report's estimates of the loss caused to the exchequer because of “illicit” exports between 2006 and July 2010 is Rs. 1,228 crore, a fact particularly embarrassing to the Yeddyurappa Government, as 42 per cent of all “illicit” exports happened in 2009-10.
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Among its many highlights is the indictment of Tourism Minister G. Janardhan Reddy, whose name and those of his associated companies figure right across the report's many chapters, indicating the central role played by the Reddy brothers and Health Minister B. Sriramulu in the scam. “A pool of violations” is how the report describes the operations of the Anantapur Mining Company owned by them.
The case that nailed Chief Minister B.S. Yeddyurappa pertains to the donation of Rs. 10 crore from South West Mining Company, a subsidiary of JSW Steel Ltd., to the Prerana Trust belonging to the Chief Minister's family.
The other case mentioned in the report, where land owned by the Chief Minister's family was purchased at a highly inflated rate by the same company is already in court. These amounts were paid in return for mining clearances.
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The former Chief Minister H.D. Kumaraswamy is indicted for using his clout to push for the grant of mining leases to three companies owned and promoted by businessman Vinod Goel, who is described in the report as a person with “well-established connections,” and who is accused of fraud and forgery.
Beyond the big names, the report methodically uncovers the modus operandi of mining companies in the systematic extraction, transportation and trade in illicit iron ore. It identifies a mining cartel of 15 companies that were used by Obulapuram Mining Company and AMC (owned by the Reddy brothers) to spread their stranglehold on the industry.
Separate chapters of the report deal with the use of the technique of under-invoicing used by exporters, the use of benami mining companies, and the tracking of the trail of funds of exporters through “authorised dealer banks”.