AN INDEPENDENT-LED inquiry implicated a prominent Indian opposition politician in a $3.6 billion (£2.2 bn) illegal iron ore mining scandal on Wednesday (July 28), underscoring a need to overhaul and better regulate India's booming but graft-ridden mining sector.
The extensive report into mining graft in southern Karnataka state accused its chief minister, B.S. Yediyurappa, and other key officials of causing at least $3.6 billion (£2.2 bn) in lost state revenues between 2006 and 2010 from illegal mining and a litany of abuses.
“This inquiry found that there's a large scale involvement of officials, powerful people, both in administration as well as in the government," independent ombudsman Justice Santosh Hegde, who spearheaded the report said.
Several other senior officials with the opposition Bharatiya Janata Party (BJP) including the state tourism minister Janardhana Reddy, were also named in the report.
"I have not done any mistake. I don't think I need to worry about anything," Yediyurappa said. He has rejected calls for his resignation. Other BJP officials were not immediately available for comment.
While the report is not legally binding the political implications are far reaching and analysts, as well as several members of the BJP, predicted several resignations would follow.
With India's ruling Congress party coalition reeling from a spate of graft cases including a multi-billion dollar telecoms scandal, the spotlight on the BJP could give the stricken government of Prime Minister Manmohan Singh some respite.
Hegde said 400 firms and 787 people had been implicated in a web of corruption involving mining, transport, customs and shipping officials, leading to hundreds of thousands of tonnes of iron ore going missing from mines across the state.
Illegal mining is a major problem across India, as powerful businessmen, often in cahoots with officials, plunder the country's mineral wealth to meet surging demand for commodities like iron ore in places such as China.
India is the world's No. 3 iron ore supplier after Australia and Brazil. Karnataka is India's second largest iron ore producing state but deep-rooted graft and conflicts led authorities to once even impose an export ban that spiked global iron ore prices.