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Justice Hegde Report on Illegal Mining in Karnataka

Justice Hegde Report on Illegal Mining in Karnataka

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Published by: Kevin Cohen on Jul 28, 2011
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Report Page 1 of 464
No. COMPT/LOK/BCD/89/2007 Multi-Storied Building,Dr. B.R. Ambedkar Veedhi,Bangalore - 560 001.Dated 27th July, 2011
(i) Govt. Notification No. CI 164 MMM 2006,dated 12/03/2007(ii) Govt. Notification No. CI 164 MMM 2006 (Part),dated 09/09/2008(iii) Govt. Notification No. CI 164 MMM 2006 (Part),dated 24/12/2008 and(iv) Government Order No.CI 164 MMM 2006 (Part),dated 19/07/2010- - - - -In exercise of powers conferred under Section 7(2-A) of theKarnataka Lokayukta Act, 1984 (hereinafter referred to as the‘Act’), the Government of Karnataka, had referred the followingissues for investigation and for submission of a report by theLokayukta to the Government with specific recommendations, vide Government Order No. CI.164.MMM.2006 dated12/03/2007. The scope of investigation, as per the saidGovernment Order, covers the period from 01/01/2000 to22/07/2006. Subsequently, vide G.O. No. CI 164 MMM 2006(Part), dated 09/09/2008, the scope of investigation wasextended till 09/09/2008 and vide No. CI 164 MMM 2006 (Part),dated 24/12/2008, the scope of investigation was further extended till 24/12/2008. Thereafter, vide No. CI 164 MMM2006 (Part), dated 19/07/2010, the scope of investigation is
Report Page 2 of 464
further extended till 19/07/2010, after including one more termof reference, in addition to those contained in the G.O. dated12/03/2007. The terms of reference as per G.O. No. CI 164MMM 2006, dated 12/03/2007 are as follows: The facts leading to the reference as well as the terms of reference are as follows:
“(i) The spurt in the international prices of steel and iron ore during last 3-4 years has made the mining and export of high quality iron ore from the mining in Bellary, Tumkur and Chitradurga Districts very lucrative. With the average cost of production of iron ore at around Rs.150 per ton, and the royalties to be paid to the Government being abysmally low at Rs.16.25 per ton for different grades there have been serious systemic distortions due to the high profit margins. This has led to allegations of large scale corruption and complaints of profiteering through illegal mining with the complicity of the authorities in all levels of Government.(ii) The Government in its orders vide notification No. CI 16 MMM 2003 and No.CI 33 MMM 1994 both Dated: 15.03.2003, de-reserved for private, mining an area of 11620 square km in the State, meant for State exploitation/ mining by the public sector and notified the surrender of an area of 6832.48 hectares of prime iron ore bearing lands respectively, which has paved way for distribution of public assets to select private individuals,/ entities without regard to their professional or technical or business background.
Report Page 3 of 464
(iii) The entire exercise was undertaken in manner so as to benefit only a select few individuals/entities. The main objectives behind de- reservation i.e. to encourage mining based industries to create more employment opportunities in private sector, to attract private capital and professional management for optimal use of state mineral resources were given a go by and allotments were made to the applicants on considerations other than merit.(iv) It has been alleged that in the name of issuing temporary transportation permits to lift and transport iron ore in patta lands [which by itself is nor  permissible in law], large scale illegal mining activity was allowed to be carried out for certain period, even in the forest areas, having no link to the survey numbers of patta lands and for transportation of the illegally mined ore from the forest areas on the strength of such forest passes/ transport permits.(v) It has been reported that the State has been deprived of its revenues. There have been many complaints from transporters associations regarding overloading of Transport vehicles, that illegal gratification was sought for allowing overloading of iron etc., and the repeated complaints and representations by transporters associations, it has been alleged to have not been seriously considered by the Government. It is also alleged that most of the ore not accounted for and transported illegally in excess was the out come of illegal mining activities.

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