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Iron ore conflict, corruption and illegal operations in Bellary, Karnataka, India


Bellary district in Karnataka is the largest source of iron ore in the state. Bellary has the largest reserves in Karnataka, and accounted for over 60% of the iron ore extracted in the state in 2011. With close to 124 operating mines as of 2011, it accounts for close to 60% of the iron ore extracted in the state. Of the 266 mines in the state, Bellary accounted for 98 mines over an area of 9,527 ha . Although mining operation in the region have been going on since the late 1990s, the sharp increase in iron ore prices since 2000 led to a sharp increase in extractivism in the region which was commonly perceived to be illegal in nature. In 2007, the State Lokayukta appointed a committee to look into the allegations of illegal mining. The resultant justice Santosh Hedge Report on illegal mining in Karnataka submitted in 2008, reveals the extent of illegality, corruption, and plunder of the mineral wealth of the region by a few powerful actors. Over the four years between 2006 and 2010, the Reddy brothers—the largest iron ore mining barons in the region, and powerful local politicians, acquired close to Rs. 16, 085 crores in illegal wealth. Additionally, the extensive report on illegal mining revealed close to 700 mining officials, and 400 companies involved in illegal activities .  In 2012, a blanket ban on mining operations as imposed by the Supreme Court of India. Operations of some mines belonging to companies that did were legally operating has resumed.    

Basic Data

Name of conflict:Iron ore conflict, corruption and illegal operations in Bellary, Karnataka, India
State or province:Karnataka
Location of conflict:District
Accuracy of locationMEDIUM (Regional level)

Source of Conflict

Type of conflict. 1st level:Mineral Ores and Building Materials Extraction
Type of conflict. 2nd level:Other
Specific commodities:Iron ore

Project Details and Actors

Project details

As described in the report "The Horrors of Bellary" (Ritimo, 2014), 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 had 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’".

Project area:9527
Type of populationRural
Start of the conflict:01/01/2000
Company names or state enterprises:Reddy brothers companies (Karnataka) from India
Relevant government actors:Chief Minister and gvernment of state of Karnataka
Lokayukta (ombudsman) of state of Karanataka
Supreme Court of India (Central Empowered Committee)
Environmental justice organizations (and other supporters) and their websites, if available:Samaj Parivartana Samudaya

Conflict & Mobilization

Groups mobilizing:International ejos
Local ejos
Local scientists/professionals
Forms of mobilization:Involvement of national and international NGOs
Objections to the EIA
Official complaint letters and petitions
Appeals/recourse to economic valuation of the environment


Environmental ImpactsVisible: Air pollution, Loss of landscape/aesthetic degradation, Noise pollution, Soil contamination, Deforestation and loss of vegetation cover, Surface water pollution / Decreasing water (physico-chemical, biological) quality, Groundwater pollution or depletion, Reduced ecological / hydrological connectivity
Socio-economical ImpactsVisible: Increase in Corruption/Co-optation of different actors, Lack of work security, labour absenteeism, firings, unemployment, Social problems (alcoholism, prostitution, etc..)


Project StatusStopped
Conflict outcome / response:Institutional changes
Court decision (victory for environmental justice)
New legislation
Technical solutions to improve resource supply/quality/distribution
Application of existing regulations
Project temporarily suspended
Do you consider this an environmental justice success? Was environmental justice served?:Not Sure

Sources & Materials

Juridical relevant texts related to the conflict (laws, legislations, EIAs, etc)

Report on the reference made by the Government of Karnataka under Section 7(2-A) of the Karnataka Lokayukta Aat 1984 (PART – II), 2011

References to published books, academic articles, movies or published documentaries

Bhushan, C., 2008. Rich, lands, poor people: The Socio-Environmental Challenges of Mining in India. India Econ. Rev., 5, 44-53.

How Bellary was laid to waste. Down to earth.

What bleeds Bellary. Down to earth.

Red Earth and fine dust: political choices in the 'Republic of Bellary'. The Hindu.

Red Earth: How illegal mining devastated Bellary, Ananthapur. FirstPost.

Related media links to videos, campaigns, social network

The Horrors of Bellary. 18 December 2014, by Intercultural Resources. Ritimo.

Livemint.How Bellary went from boom to bust. 23 Dec 2019. Sugata Srinivasaraju. Between 2006 and 2011, Bellary saw a massive boom, until the Supreme Court banned mining in the district in 2011, when the illegalities and environmental degradation came to light

The dusty city in Karnataka is a symbol of how the collapse of a crony capitalist enterprise can destroy progress

Meta information

Contributor:Arpita Bisht, International Institute of Social Studies, The Hague.
Last update01/10/2020
Conflict ID:5243