In Indian mining town, the barons are back – by Rama Lakshmi (Washington Post – May 2, 2013)

Bellary, India — 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 government crackdown in 2011 shuttered the mines in the name of lawbreaking and corruption, 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 for irregularities, as well as dozens of candidates 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 that has seen 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 big environmental cost, as measured in the razing of forests and the ruin of old water channels, they say, but new jobs and 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 burnt,” said Kumarasamy Kuruba from Taranagar village, a heavily built, sarong-wearing man who operated the excavator in a mine for 11 years.

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