Home > Uncategorized > Mining Mafia & Maoism, two sides of the same coin.

Mining Mafia & Maoism, two sides of the same coin.

Karnataka exemplifies how an illegal mining mafia can overwhelm, capture and suborn a State to its purpose given a suitable opportunity for a large enough profit.  Karnataka is not a backward state. It is reasonably well developed, home to India’s Silicon Valley in Bangalore. It boasts of premier Public Sector names in the high technology defence industries such as aeronautics and power equipment.  Yet, in the Iron Ore mining district of Bellary, a combination of lax governance, dysfunctional regulation and corrupt politicians have come together to capture the entire government. Even the Chief Minister is a nominee of the illegal mining mafia.  The entire state administrative structure, including the revenue department, district administration, police, and central customs has been suborned to the mafia’s interests. Exposure after exposure of the mafia & its nexus with the state, in the media and the legislative assembly, has failed to curb or dislodge it. How can this happen in a democracy with a free press? The rise of the mining mafia and the techniques it has used to gain and retain control of the State apparatus is worth a serious study.  There is reason to believe that the same mechanisms may be in use in such states as Chattisgarh, Jharkhand and Orissa.


Over the last 5 to 10 years, the mining mafia has moved millions of Tons of high grade Iron Ore from Bellary to port towns like Goa for export to world markets, especially China and Japan.  The exports run into billion of dollars.  How could such a vast enterprise function if the state did not covertly support the activity? The ore was openly mined with industrial machinery and a huge labour force. It was transported by road over the state highways with multiple check points. Barges were used at ports to take it for loading onto ships at high seas. Payment mechanisms for these exports were fashioned through a variety of stratagems, legal and illegal. And once state connivance was indeed established, how was it possible to continue such illegal activity without Central Govt intervention? Why did the Central Govt not intervene to protect its interests in the mines? Most of all, how was all this possible over such a long period of time in a democracy with its inbuilt checks and balances?


Property rights in India are still colonial era based. The British delinked mining rights from landownership.  All mining rights vest in the Govt. In practice, unless the Govt moves to exploit a mineral, or parcel out the mining rights through a lease, the mines belong to nobody and thus everybody. The State does not physically control the lands in far flung areas. Nor does it make timely leases upon discovery.  When world commodity prices boomed, the opportunity for profit was sufficiently high for the mining mafias to move in unchecked. Starting small scale, these illegal enterprises grew on easy profits to huge giants muscling out weaker players. They had the resources to corrupt everybody who stood in their way – revenue & police officials, politicians & ministers.  Perhaps they even captured the local ruling party.  Certainly the Chief Minister has been found in their pay. What more can you ask by way of State capture?  Once established in their hold on power, they have proved impossible to dislodge.  The complete failure of the state could not be starker.


The mining Mafiosi in Karnataka are urban based “entrepreneurs”.  They exploited a weak state with dysfunctional laws and corrupt politicians.  Quite like them are another class of similar “entrepreneurs” but who operate deep in the rural & forested areas.  They are after mines too.  But they lack the capital and the capacity to capture the state through bribery. Nor do they have the wherewithal to develop and exploit mines.  Their method consists of organising villagers into insurrectionists and arming a selected cadre among them. Their main demand is a share of the mining profits & political power that comes through control of access to the mines.  As in Bellary, a slothful and corrupt local govt, dysfunctional laws & past history of exploitation enables these “entrepreneurs” to accumulate power. A following among tribals allows local capture of government.  In effect they are lesser brethren of the mining Mafiosi.  Their methods may be different but the objective and the strategy is very much similar. Maoism and mining Mafiosi are then two sides of the same coin.  One justifies and boosts the other.


The intriguing question here is the nature of politics that obtains in such resource rich states where Government is weak.  These include states such as Karnataka, Chattisgarh, Jharakhand, and Orissa.  Are the illegal mining mafias in direct competition with the Maoists for control of mines & other resources?  Are we really seeing a sort of competition, indeed “class war”, between these two groups, both using a false discourse to justify their capture of a hapless State?  Maoists would have us believe that they are fighting the State for the rights of the tribals and others people who have been cheated out of their rights by capture of the state by “vested interests”.  That this discourse is plausible, but nevertheless false, is obvious from history.  Maoists have been co-opted into the system at first opportunity if given power and a share of the booty.  Likewise the mining mafia constructs a jingoist discourse of nationalism and false religiosity seeking to don the mantle of true entrepreneurs who is unfairly thwarted by a State. They justify breaking the law by alleging state capture by leftists.  Examples of both the competing discourses are before us & may be driving the politics of resource rich states at the margin.  Both the discourses are not only false but also ruinous of true national interest.


The idea behind drawing a parallel between the competing discourse of the Maoists and the illegal mining mafia is not to paint a misleading equivalence. Instead it is emphasize that any true discourse to counter the Maoists must incorporate curbs that end illegal mining and return true ownership of resources to local communities.  The state has to be discriminating enough to be on the side of the tribals while neutralizing the Maoists armed cadres that challenge its writ.  The state has little chance of winning and carrying the tribals with it if it is perceived as furthering the interests of illegal miners.


Govt has made a beginning with a new mining law that recognizes tribal & local community’s equity in mines.  It stipulates giving them a 26% share.  This is welcome but not enough. The fact is the mines would belong to tribals in toto if we had strong property laws.  So the 26% figure is rather arbitrary.  Secondly awarding equity stakes to tribals who don’t understand money fully is questionable.  The payout should be fixed and easy to quantify.  The money so raised should go to schooling, communication and health care in local communities besides some income support.   All this presupposes Govt ability to construct a narrative for the tribals where it is squarely on their side and against illegal mining.  The fact that it is unable to control illegal miners even in a relatively well developed state like Karnataka shows how far the Govt has to traverse in constructing such a discourse.

Categories: Uncategorized
  1. July 25, 2011 at 9:11 am

    Excellent article, asking the right questions. Did you know that under Raja the MOEF was instrumental in handing out a multitude of licences to ‘legalise’ mining in reserve forest land in the very states that u mention (not sure of Karnataka)? The mining mafias had direct access through the MOEF to the state govt departments in the usual quid pro quo…

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