IAS Goof up Leads to Illegal Mining by OMC

During the tenure of Dr. YS Rajasekhar Reddy as chief minister, Obulapuram Mining Company, owned by Gali Janbardhan Reddy was issued with a mining license in an extent of 68.5 hectares in Anantapur district. Accordingly, a GO No. 151 was issued on June 18, 2007 by then secretary to AP government, Y Srilakshmi.

Interestingly, The GO 151 issued by the Industries and Commerce Department opened the floodgates for illegal mining and export of iron ore. Taking advantage of the words 'captive mining' missing in the GO, the OMC used the lease for Anantapur ( where there is no ore) to actually carry out illegal mining in Karnataka's Bellary district. "In the records, the ore was shown as mined from Anantapur and over 30 lakh tones of iron ore was exported," said an insider source.

Though there were six other contenders for the mining license, it was given to OMC as it had promised to utilise it for captive use. If the words 'captive mining' had figured in the GO, then the iron ore mined by OMC in the lease area in Andhra Pradesh would have gone only to the Bramhani steel plant proposed to be established by OMC. "In fact, OMC could not have mined the iron ore at Anantapur as the steel plant proposed by it was yet to come up," the sources pointed out.

But in the files pertaining to the mining lease that were taken by the CBI last week as part of its probe into the Y S Jaganmohan Reddy assets case, the noting by then chief minister Y S Rajasekhara Reddy clearly mentions that the license is only for 'captive mining'. "As a result, the CBI cannot hold YSR for any wrongdoing in the granting of the lease. The responsibility for the omission of the crucial two words in the GO is likely to fall on Y Srilakshmi, then secretary in the industries and commerce department, whose name figures in the GO," said the sources.

Apart from Srilakshmi, the omission of the two crucial words was also overlooked by then mines and geology minister Sabita Indra Reddy. The fact that the words 'captive mining' was missing came to light when former chief minister K Rosaiah was forced to refer the mining issue to the CBI following tremendous pressure from the opposition parties in November 2009. A senior IAS officer who scrutinized the files at the time confirmed that the file notings on the mining lease issue specifically mentioned the words 'captive mining.'