Reddys have the last laugh, National mines regulator helpless.

m.today

New Delhi, March 18: Why does the regulatory apparatus appear toothless in the face of the Reddy Republic? Union Mines Minister B K Handique says that officials of the national mines regulator, the Indian Bureau of Mines (IBM), are too “scared” to inspect the Reddys and they need “constant encouragement”. Ask these officials and they say what they need is more staff. The IBM regional office in Bangalore and Hyderabad, for example, responsible for about 500 mines each, has, at best, six officials to monitor and inspect illegal mining in the entire region.
An investigation by The Indian Express reveals there’s another reason that no one talks about.

 

The Reddys’ influence and clout — as detailed in the first two parts of this series — also derives from an absence of political will to lay down the law or usher in reform. In fact, an unreformed mining sector has meant discretion in award of licences by the state and the Centre, poor accountability, non-revision of royalty rates in time, an audit framework that exists only on paper and a neglect of oversight by state agencies.

Consider this: In the seven years since Obulapuram Mining Company, the Reddys’ flagship, obtained its first lease in 2002, IBM has inspected its mines just thrice against the required 14 (twice each year). More shocking is an instruction from the IBM headquarters in Nagpur to its Hyderabad office in August 2008 to stop inspecting mines of OMC and Anantapur Mining Corporation, both owned by G Janardhana Reddy and his brothers. The IBM’s reason: these mines were the subject of legal disputes and so “sub-judice”. Result: the IBM concluded that OMC and AMC had over-exploited mines — mined way above their specified limits without the requisite prior approvals — and yet, it tied its own hands.

MONITOR LOOKED THE OTHER WAY

Official records, interviews with regulators and investigators reveal how the Reddys took advantage of the IBM’s regulatory lapse.

For five years in a row, between 2004-05 and 2008-09, when global iron ore prices zoomed 500 per cent spurred by Chinese demand, OMC over-exploited its most productive mine of 25.98 hectares. Against the permission by IBM to extract 6.48 million tonnes during the period, OMC extracted almost twice this amount — 11.88 million tonnes. In another adjoining mine over 39.5 hectares, OMC mined 2.02 million tonnes during 2007-08 and 2008-09 against its approved mining plan for 1.64 million tonnes.

“Every company is required to submit a five-year mining plan to IBM based on scientific extraction principles. OMC extracted double the quantity it originally said it would produce,” said an official with IBM in Hyderabad who did not wish to be quoted.

In the only two inspections that were carried out by IBM in September 2004 and January 2005, officials did detect violations of over-extraction, to which OMC submitted a modified mining plan only after about 18 months.