In Indian mining district, the barons are back


India’s Congress party candidate and mining millionaire Anil Lad is surrounded by voters demanding clean water and toilets in the mining district of Bellary in southern India. (Rama Lakshmi/TWP)

Until recently, this iron-ore mining district in southern India was a byword for cronyism and plunder. Now it represents redemption, though not everyone is cheering.

It was steel that made Bellary a boomtown — steel sought by China in the run-up to the 2008 Olympic Games. As demand soared, prices leapt 15-fold. Indians who cut corners and mined illegally while the government looked away got rich, including a modern-day robber baron named Gali Janardhana Reddy, whose 60-room mansion stood out among his spoils.

A Supreme Court-led crackdown in 2011 over lawbreaking and corruption in the mining sector shuttered the mines and led to a prison sentence for Reddy, accused of treating Bellary like his private fiefdom.

But now other barons are back, and unapologetically so. Their rebound reflects complicated attitudes about ambition, corruption and the law in an India where uneven enforcement of rules has fueled the rise of a new wealthy class in fields such as mining and real estate.

In a district election campaign underway here in the southern state of Karnataka, the candidates include a millionaire named Anil Lad, whose mining licenses were recently canceled because of irregularities, as well as dozens fielded by a new political party launched by Somashekar Reddy, the mansion builder’s older brother.

“Yes, my brother mined illegally, but everybody did it openly at that time; such was the lure of the Chinese market,” the elder Reddy said. “The local economy got a boost because of our mining activities. I tell the voters, ‘When my brother went to jail, the goddess of wealth left thousands of Bellary homes, too.’ ”

As the fourth-largest producer of iron ore in the world, India has tolerated a broad range of illegal and reckless mining over the past two decades, a period marked by poor regulation and oversight. The ore has fed steel production not just in China, but also in India, with its own soaring pace of construction.

In Bellary, a sleepy district known previously for searing heat, swirling red dust and locally made jeans, some residents look back on the boom years with nostalgia. The iron-ore explosion may have come at a major environmental cost, as measured in the razing of forests and the ruin of old water channels, they say, but jobs were created, businesses flourished, roads were built, and banks, hotels and insurance agencies opened.

“We could afford to eat meat in every meal, even though our lungs were full of mining dust, everybody coughed all the time, and our eyes burned,” said Kumarasamy Kuruba, a heavily built, sarong-wearing man from Taranagar village who operated the excavator in a mine for 11 years.

The Chinese demand and the subsequent clampdown skewed prices of raw material and slowed industrial production.

“When the Chinese demand sent the price of iron ore soaring, we had to pay through our noses here,” said P. K. Murugan, vice president of the JSW Steel plant in Bellary. “All the mining was banned, and we again suffered from a severe shortage of raw material.”

In Bellary, the most infamous baron was the younger Reddy, who, in addition to his mansion, brazenly displayed other riches — buying helicopters and fancy cars, and even acquiring a throne of gold. In the name of religious charity, he gave away a diamond-studded gold crown estimated to be worth $9 million for the adornment of a temple deity.

He intimidated smaller miners and acquired their mines. Senior police officers and bureaucrats would sit outside his home, waiting with trepidation for instructions. The Indian media called the city “the Republic of Bellary.”

In the current campaign, the mining millionaire Lad, a Congress party candidate, makes no mention of previous scams; he is promising voters clean water and toilets.

The state’s ruling Bharatiya Janata Party, which benefited from Reddy’s riches, mildly suggests that it has turned over a new leaf. “We knew about Reddy’s illegalities, but we are now clean,” Veerupaksha Gowda, the BJP candidate, said.

“The wealth generated by this kind of manipulation is thrown back into politics,” said Prithvi Datta Chandra Shobhi, an assistant professor of history at Karnataka State Open University. “The distinction between politics and business has completely collapsed.”

The Association for Democratic Reforms, an election watchdog, recently released a report showing that the portfolios of 179 repeat candidates had soared by an average of 88 percent in the five years since the last statewide contests.

Tapal Ganesh, a whistleblower whose small, family-owned mine in Bellary was illegally acquired by Reddy, said he has given up hope of any real change. He said: “Politics is dirty in India, but it is dirtiest here in Bellary.”

Rama Lakshmi has been with The Post's India bureau since 1990. She is a staff writer and India social media editor for Post World.
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