Climate Change, Corporate Accountability, Indigenous Struggles for Land, Mining Scams and Urban Displacement

The Horrors of Bellary

, by Intercultural Resources

Bellary is one of the largest producers of iron ore in India; where even digging a small mound of the top soil generates some iron ore. However, the district also emerged as the hotspot for one of the country’s biggest mining scams. The Supreme Court of India, which banned mining in Bellary in 2011, partially relaxed the ban recently. This article mines the transformation of Bellary, from being a lush green district to becoming the bleeding district of Karnataka. The article also looks into the history of the rise of the Reddy brothers – the mining barons of Bellary - and how they stripped Bellary off its wildlife and safe drinking water. It also inquires into the deadly ailments the people of Bellary have suffered and still continue to suffer.

By Steffi Elizabeth Thomas


A remote district of Karnataka, Bellary became a famous hub for iron ore extraction during the Beijing Olympics in 2005-06. Mining activities in Bellary were carried out by the state government; however, the rising demand gave private players a chance to be a part of the mining industry. The huge demand for iron led to excessive mining, so much so, that the lush green Bellary got transformed into a barren land, devoid of agriculture and with shrinking ecosystems. The top private players of mining in Bellary were the Reddy brothers, who ensured their monopoly in the sector by controlling the state government. They misused their powers as ministers and /or MLAs to such an extent that today the Karnataka – Andhra Pradesh border stands erased due to mining.

The Lokayukta (an anti-corruption ombudsman organization in the Indian states) published its report on illegal mining in Bellary in 2011, asking the state government to take the required measures to prevent further degradation. The Supreme Court, too, intervened by banning mining and the export of iron ore from Bellary. However, Bellary became the exemplar of ‘where there is power and money, all is fair’. A hunger for profits made business honchos compromise the biodiversity of Bellary, harming the people and wildlife. Bellary was scarred deeply and left in dire need of stringent measures to prevent further deterioration and to heal the gaping wounds that the excessive mining left behind.

Illegal Mining

The state of Karnataka is rich in minerals and ores; particularly iron ore. There are 266 mines in the state, of which 134 are located in forest areas. Bellary district in Karnataka alone has 148 mines spread over an area of 10,598 hectares of land. The Indian Bureau of Mines estimated iron ore reserves to be about 1,148 million tons. The Bellary mines took off in 1999, when independent parties were encouraged to take up iron ore mining as per the 1993 National Mineral Policy. This was pushed further by the ‘Export Oriented Development’ proposed by the Karnataka State Mining Policy in 2000. In March, 2003, about 11,620 sq km of mining area was de-reserved for private players. Mining in Bellary soared further with the Beijing Olympics, which enhanced the demand for iron to such an extent that the price of iron ore rose 4 times between 2000 and 2005-06. The huge profits from mining even attracted several rich farmers to start small mining firms.

Over the years, however, allegations of illegal mining in Bellary began cropping up, and therefore, in March, 2007, the then BJP led coalition government of Karnataka asked Justice Santosh Hegde to probe the allegations. The Lokayukta Report submitted in December, 2008 stated that at the continued extraction rate, the Bellary iron ore reserves would be depleted within the next 20 years. It directed attention to the meagre amount of royalties the state received (US $ 0.27-0.45 per ton), compared to the huge profits made by the private mining corporations (over US $ 17 per ton). The report also pointed out several irregularities in the processes followed for de-reservation of land, grant of lease, encroachment of forest cover, benami transactions, and grant of temporary transport permits not permitted by law. The report brought to light the improper orders passed by the Department of Mines and Geology, irregularities in the grant of stock yard license, as well as, transport of ores, besides the environmental damages caused by mining. The Lokayukta also reported the actions taken by the Chief Minister, B.S. Yeddyurappa and the State Minister of Mines, N. Dharam Singh.

Post the submission of the Lokayukta Report, the government made efforts to curb illegal mining, but their efforts were in vain. This was well proved by the Belekeri theft in 2010, when forest officials seized 800,000 metric tons of illegally transported iron ore, of which 600,000 metric tons disappeared after the seizure.
Two years after the release of the Lokayukta report, only 7 out of the 99 Bellary iron ore leases were surveyed; of which 6 were found to have flouted the boundaries of the mining leases. In 2009, the Supreme Court appointed a Central Empowered Committee (CEC) to look into illegal mining in Bellary, based on a Public Interest Litigation (PIL) filed by the Samaj Parivartana Samudaya (an NGO). The CEC reported that the state government had not paid any heed to the recommendations of the Lokayukta. The report also stated that illegal mining in Bellary had risen at a tremendous rate between 2009 and 2010. It suggested that the exports from Bellary be banned and the mining leases granted to companies which were found violating laws be revoked.

The Lokayukta submitted a second report in August, 2011 which led to the resignation of the Chief Minister, B.S. Yeddyurappa. The second report pointed out a loss of Rs.16,085 crIllegal Miningore (approximately US $2.67 billion) to the exchequer between 2006 and 2010. It also identified instances of bribes amounting to as much as Rs. 2.46 crores (around US $ 40,8705), along with the transport of ores beyond the permits. This led to the arrest of the mining ‘barons’ of Bellary, G. Janardhana Reddy and his brother-in-law, Srinivasa Reddy, by the CBI and the naming of over a 100 companies and 787 public officials for misconduct. The report revealed information regarding several groups of companies - Obullapuram Mining Company Private Limited, Anantapura Mining Company, and Associated Mining Company – owned by the Reddys and their associates. It was reported that the Reddys would identify mines that were not permitted to operate or were engaged in border disputes, and would then control them via ‘raising contracts’.

The Unholy Brothers

The story of Bellary remains incomplete without the Reddy brothers. Born to a police constable, the three brothers – Gali Janardhana Reddy, Gali Somashekhara Reddy, and Gali Karunakara Reddy, came from a middle class family who started with a small chit fund business named Ennoble India Pvt. Ltd., in 1989. They operated in the states of Karnataka, Andhra Pradesh, and Tamil Nadu. It wound up in 1998 followed by cases of fraud and cheating equivalent to Rs. 200 crore (US $ 332,280). Then, they ventured into iron ore mining just at the peak of its demand with a mere investment of Rs. 50 lakh (US $ 83,070) and grew to be the mining magnates of Bellary.

Janardhana Reddy took over GRR (G Raghava Reddy) Mines between 2000 and 2001 on sub lease to one Anil Lad. When Lad’s earnings increased through foreign clients, J. Reddy, with his associates, conspired and secured back the lease in 2003. This was also the time when the Beijing Olympics was at the corner and the demand from China for iron rose tremendously. The Reddys became one of the leading exporters of iron ore to China, which allowed them to make huge profits. The GRR Mines or as it’s popularly known, the Obulapuram Mining Company Pvt. Ltd., had a daily turnover of about Rs. 5 crores (US $ 830,703) to Rs. 6 crores (US $ 996,843).
The 1999 Lok Sabha polls were the turning point for the Reddy brothers. The brothers are said to have powered the campaign of the BJP candidate, Sushma Swaraj when she contested against Sonia Gandhi from Bellary. While the BJP candidate did not win in Bellary, the Reddy brothers and their close ally B. Sriramulu were given complete charge of the party affairs in Bellary by the BJP.Within months of coming to power, the Reddys threatened to withdraw support to the government if their demand to have a free hand to run the mining racket was not granted. Besides mining, the Reddy brothers also owned two cable networks – Bellary City Cable and City Plus – that covered Bellary, Koppal, and Gadag. They were also owners of a Kannada newspaper.

From Mining Barons to Goons

Several complaints were filed against the brothers besides the case of illegal mining. The Reddy brothers invested Rs. 2,000 crore (US $3.32 billion) into an integrated steel plant, Brahmani Steels, for which YSR Reddy, the Chief Minister of Andhra Pradesh, had sanctioned large acres of land. YSR Reddy had also sanctioned 3,115.64 acres of land to the Reddy brothers to set up an airport just 50 km away from an already existing airport. The Comptroller and Auditor General pointed out several irregularities in the sanctioning of the land, besides the fact that it was illegal for private players to set up an airport without prior permission from the Central Government. YSR’s death weakened the ‘Reddy links’, though Jagmohan Reddy (YSR Reddy’s son) was caught with huge amounts of money transferred to him by the Reddy brothers based on their partnership.

On September 10, 2009 Ramlingaiah Hiremath from the Department of Mines and Geology, Hospet filed an FIR for illegal mining against BJP MLA and chairman of the Karnataka Milk Federation, G Somashekhara Reddy. No action was taken in regards to this complaint. On December 30, 2009, V. Anjaneya (a former deputy manager of the Obulapuram Mining Company (OMC) turned whistleblower) filed a complaint with the State Human Rights Commission against the Reddys for human rights violation as Anjaneya and his family were threatened and tortured by the Reddy brothers. On March 29, 2010 Tapal Ganesh, owner of a rival mining company, was beaten up by goons. Ganesh was assisting the Union government’s survey, which had to determine the extent of encroachment upon reserved forest areas by the OMC, and had to verify allegations on the deliberate destruction of the boundaries between Karnataka and Andhra Pradesh.

Resignation and Arrests

The Belkeri theft of 2010 became a major link in the involvement of the Reddy brothers and their mining company, Obullapuram Mining Corporation (OMC).

July, 2011 – B S Yeddyurappa resigns
The Lokayukta indicted the then Karnataka Chief Minister, B S Yeddyurappa for causing huge losses to the exchequer and for siding with the Reddy brothers. Yeddyurappa eventually resigned as the Chief Minister.

August, 2011 – Bellary flouts Supreme Court orders
The Supreme Court had appointed the CEC to look into the illegal mining scandal at Bellary. The CEC report revealed that G Janardhana Reddy and his brother Karunakara Reddy had been mining in areas demarcated as forest areas since 2004 and that they extracted more minerals than they were permitted to. The report also stated that the Reddy brothers were allowed to do so by the connivance of the Karnataka government. Janardhana Reddy, however, claimed innocence and slammed the reports for being prejudiced. With this incident, the Supreme Court completely suspended all mining activities in Bellary. But, within 48 hours, nearly 10,000 tons of ores were seized in raids conducted in four districts of Karnataka, which clearly exhibited how the mining corporations easily flouted even Supreme Court orders.

September 5, 2011- Janardhana Reddy arrested
The CBI conducted a raid at G Janardhana Reddy’s home, and seized Rs. 3 crore (US $498,421) in cash and 30 kg of gold. He, along with his brother-in-law, Srinivasa Reddy, were arrested and kept in judicial custody for 14 days.

September 23, 2011- Supreme Court demands deeper inquiry

G Janardhana Reddy had been arrested for flouting mining laws in his Andhra Pradesh based corporation, OMC. However, the Supreme Court required that the Reddy’s Karnataka mining corporation, Associated Mining Company (AMC) also be probed into. The court suspected illegal mining in this company as well, because the company drew 1 million tons of iron ore from just 10 hectares of the leased area for mining.

June 21, 2012 - Enforcement Directorate plans to attach J. Reddy’s properties

Janardhana Reddy had been under judicial custody since September, 2011; lodged at the Bangalore Central Prison. To make the case against him stronger, the Enforcement Directorate decided to attach his properties to establish links between the Rs. 884 crore (US $146.8 million) earned through illegal mining, and his mining company, OMC. His judicial custody was thus, extended to July 2, 2012.

Protests and Prayers

November 17, 2009 – Green protest
Under the banner of the National Committee for Protection of Natural Resources (NCPNR), environmentalists started a protest as part of the ‘Azadi se Swaraj’ campaign against the illegal mining carried out in Bellary. The protest in Hospet, Karnataka, started from Gandhi Chowk till the Tahsildar’s office, urging the government to initiate measures to curb illegal mining in the district.

June 6, 2010 – Congress protests against Bellary Mining
Members of the Youth wing of Congress protested outside Maharani’s College, Bangalore against the illegal mining carried out by the Reddy brothers and M S Goudar, Member Secretary, Karnataka State Pollution Control Board. They raised concerns over the environmental hazards faced by the district of Bellary due to mining and the acquisition of farm land without careful research.

July 25, 2010 – Congress organizes ‘Bellary Chalo’ Padyatra
The Congress organized the ‘Bellary Chalo’ padyatra commencing from the Freedom Park to Bellary, protesting against the failure of the Karnataka state government to keep a check on illegal mining activities.

July 10, 2011 – Jan Jagruthi Jatha creates awareness on Illegal Mining
The Jan Jagruthi Jatha was organized by the Jan Sangram Parishat, wherein they called upon farmers of Bellary to create awareness about the injustice done to them via land acquisition. They were also made aware of the environmental and ecological degradation caused by the unscientific mining.

Bellary Stabbed

The Bellary mining scam has been termed as one of the biggest scams of the country till date by Justice Santosh Hegde - Lokayukta. It has not only rendered the Karnataka exchequer with huge losses, but has also degraded the environment. Many animals have been brought close to extinction. The air, water, and soil have been contaminated, which in turn have adversely affected the people in and around Bellary.

In a span of 10 years, the Karnataka exchequer has been at a loss of Rs. 4,000 crore (US $6.64 billion) due to meagre royalties paid by the mining kingpins, while they themselves earned millions in profits. Post the ban on mining by the Supreme Court, the railways lost millions of rupees, and nearly 150,000 workers in mines lost their jobs.

A study by the Supreme Court revealed that close to 8.9 sq km of forest cover has been depleted in Bellary between 2000 and 2011 on account of the excessive mining. This report has been supported by the Environment Impact Assessment (EIA), which has recommended that iron ore production needs to be reduced by 40 per cent, i.e., 25 million tons per annum to prevent further environmental degradation.

Along with iron ore mining, Bellary also suffers from granite quarrying and together they have affected the habitat of animals that require large home ranges and are sensitive to disturbances, like tigers, elephants, dholes, the lion-tailed macaque, and the great pied hornbill. The Lokayukta reported that certain species of animals like the sloth bear have vanished from the district of Bellary, and so have some medicinal plants. Large scale mining has allowed human intrusions into fragile ecosystems. Mass-scale human settlements have been established in forest areas for labor forces. Laying of power lines for electricity and pipelines carrying unfinished goods to nearby ports has negatively influenced the wildlife of Bellary, as it has broken continuous tree canopies for several kilometers, restricting the tree dwelling species to small fragments of forests. This, in turn, has limited their access to food and has affected their breeding due to genetic separation, leading to the birth of weak or sterile offspring. An example of this scenario is that of the lion-tailed macaque, whose species is close to extinction.

The killing effect of mining doesn’t end here. Mining has affected the rainfall pattern of Bellary and has rendered its land unfit for cultivation – declaring the land a no-green zone. The rainwater that flows down hillocks to replenish water aquifers, now carries so much dust that it heavily contaminates water reservoirs, which has also led to soil degradation. Reports reveal a fast rate of siltation in the Tungabhadra reservoir due to mining, which has declined the capacity of the reservoir from 133 TMC to 99 TMC (thousand million cubic meters).

This massive level of degradation of the environment has affected the health of the people of Bellary. The Human Development Report, 2005 of Karnataka, conducted a study in 27 districts and ranked Bellary 18. It ranked Bellary lowest in social indicators – literacy, health, and access to drinking water. The National Environment Engineering Institute stated in its report in 2003 that unacceptable levels of heavy metals and suspended particulate matter (SPM) in water have been found in Bellary. High incidences of respiratory disorders, anemia, lung infection, heart and skin ailments, cancer of various forms, and tuberculosis are regularly reported from Bellary. Bellary also reports the highest number of HIV cases in Karnataka. Adding to the health distress, the people are deprived of fundamental rights. Several farmers have reportedly leased out their land for mining, and many women are also employed in mining at lower wages than their male counterparts. Low wages are accompanied by poor working conditions and child labor. Children are employed in hammering, crushing, and filling boxes with iron ore at low wages.


Mining causes huge losses to livelihood and environment, and the case of illegal mining has caused Bellary irrevocable damages in terms of the health of its people and wildlife. Yet, there is much that can still be averted with regards to the lives of the district’s future adults and the unborn generations. Strict action needs to be taken against child labor as mining comes under hazardous employments. The laws the country has regarding child labor ought to be strictly implemented. The centre should take a keen and active interest in the rehabilitation of children employed as laborers in these mines. Mining leases of those employers who partake in child labor ought to be cancelled.

The centre must consider implementation of education facilities to the people of Bellary given the fact that the literacy rates are below that of Sub-Saharan Africa. The people ought to be made aware of their rights, like the initiatives taken by the Jan Jagruthi Jatha. Mining laws and forest conservation laws need to be strictly implemented. Bellary, located in the Western Ghats, one of the ecological hotspots in India and a region that is highly endangered. Saving Bellary from further degradation will be a huge step towards saving the Western Ghats.


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