Mining boom Crash to change political equations?

Crash to change political equations?

The economic downturn has impacted companies worldwide and the mining sector in Bellary is also facing the heat

Shivakumar G Malagi | TNN

Bellary: The global meltdown in commodity prices is likely to have a discernible impact on the political map of Karnataka, which has been redrawn recently by the power of Bellary’s mining lobby.

It isn’t just the ruling BJP party — riding on Operation Lotus orchestrated by the famed Reddy troika — that swept to power for the first time in the South on the back of surging iron ore prices. The Congress also has strong links to the power that flows from the bowels of the mines.

However, the dramatic fall in the fortunes of the ore — prices down from Rs 2000-2400 per tonne in 2004 to Rs 1,225 per tonne in July 2008, and to a shocking Rs 425 crore in mid-October; fall in mining activity by 50% in the Bellary-Hospet region, millions of tonnes of unsold stock — will have consequences that will play out in the political theatre in the coming months.

If the trend of depressed demand for commodities,combined with global financial upheaval, extends for a year or more, many political observers believe that the current Raj of miners-turnedpoliticians in state politics might wane dramatically by the next parliamentary elections. While it is too early to sing hosannas to the demise of mining money in state politics — after all, reserves built over a nearly decade-long boom in the iron ore industry will not dissipate overnight — it is inevitable that power equations will re-align.

And its impact will be felt across parties. The stakes are the highest for BJP, due to the role played by the Reddy brothers in pitchforking the party to power. Tourism minister Janardhan Reddy, revenue minister Karunakar Reddy, Bellary city MLA Somashekhar and their Man-Friday health minister B Sriramulu are currently the ‘mostinfluential’ miners-cumpoliticians.

None deny that the mining boom helped the Reddy brothers build the saffron party in a district that had previously elected a record 13 Congress MPs in succession. In the last assembly elections, eight of the nine constituencies voted BJP. The wheel of fortune — make it oretune — had come full circle. Interestingly, it was the Congress that spotted this opportunity first. It had a clutch of rich miners in its stable since before the mining boom in 2000. The fall in iron ore prices in Hospet is also likely to impact the Singh brothers — MLA Anand Singh of BJP and Deepak Kumar Singh of the Congress (who unsuccessfully fought as a rebel candidate in the polls), besides H R Gaviyappa of Congress who comes from a family of mining pioneers.

At Sandur, the hot-bed of rich ore deposits, it will affect the fortunes of Anil Lad, the Ghorpade family and MLA Santosh Lad.

It isn’t the Bellary MLAs alone, but some in neighbouring Koppal, Raichur, Chitraduraga, Gadag and Dharwad districts who owed much to the Bellary mining lords for their electoral victory, who will be monitoring the London Metal Exchange rather carefully these days.