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Why Mining In India Is A Source Of Corruption

August 11, 2011: The mining scandal which led to the unseating of a prominent leader in India's southern state of Karnataka is the latest scandal to hit the industry.


BS Yeddyurappa of India's main opposition Bharatiya Janata Party (BJP) quit recently after an anti-corruption report named him as a key suspect in a scam which allegedly cost the exchequer more than $3bn (£1.8bn). Mr Yeddyurappa denies any wrongdoing.


But what is undeniable is that illegal mining has been rife for years in Karnataka. The state produces about 45 million tonnes of iron ore a year and exports more than half of it to China.


It is not the only state in India where mining has become a controversial trade.


South Korean company Posco's plan to build a $12bn steel plant – India's largest foreign investment project – in the eastern state of Orissa has run into heavy weather over how much iron ore it should be allowed to export. More recently, acquiring land from the farmers for the plant has also become a problem.



And last August India rejected controversial plans by mining group Vedanta to extract bauxite in the Niyamgiri area of Orissa.


The company has proposed a $2.7bn investment in the area, a project which it says will bring jobs and development to one of the country's poorest districts. It has previously said it has complied with all rules and regulations. Read the full report here.


Source: By Paranjoy Guha Thakurta, BBC News, Delhi.


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