'Greedy' mine operators may lose licence: India

Miners in southern India have engaged in illegal mining on an unprecedented scale, a committee reporting to the Supreme Court said on Monday as it recommended the cancellation of 49 licences.

The toughly worded report by the Central Empowered Committee said the 49 licences in the mineral-rich southern state of Karnataka should be scrapped due to illegal activities.

"The extent and level of unauthorised, unregulated, environmentally unsustainable and illegal mining in its various facets has no other parallel in the country," the committee said.

The illegal mining and transport of ore "had become possible because of the blatant connivance of officials and public functionaries", the committee added.

As a result of the illegal mining, there had been an "all-round, sharp degradation of the environment... because of the unsatiable greed of a few", the report said.

The committee's report covered three districts in Karnataka -- Bellary, Tumkur and Chitradurga.

It found evidence of some illegal mining involving 72 other mines in the region and recommended they face financial penalties. Just 45 out of a total of 166 mines examined by the committee were operating in compliance with the law.

The Supreme Court earlier warned that Karnataka's iron ore mining reserves could be exhausted within 25 years due to extensive illicit mining.

Iron ore is used in steel-making and much of the mineral illegally mined is thought to be shipped to China and other strongly growing east Asian economies.

Last year, an Indian court suspended all mining activity in Bellary district where companies were accused of conniving with government officials to mine ore illegally. The ban was later partially lifted.

A corruption ombudsman said the fraud had cost the Karnataka state and federal exchequers ê3.6 billion.

B.S. Yeddyurappa, the chief minister of Karnataka who was accused of being at the centre of the mining fraud, resigned after the scandal broke.

India has been shaken by a slew of corruption scandals, including the allegedly fraudulent sale of telecom licences in 2008 estimated to have cost the country up to $39 billion.

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