National

AP scraps controversial mining project

| | Updated on: Nov 12, 2014

The deal signed with Bothli Trade during the YSR regime kicked up an international storm

The controversial, eight-year saga of the multi-million dollar mining project — involving top Indian politicians, a Ukranian billionaire and his business conglomerate and Indian origin US residents — which kicked up a global bribery scam and a political storm in India in April-May, has finally come to an end.

The Andhra Pradesh Government has decided to scrap an agreement signed in 2006 with Bothli Trade AG, a Swiss company. Part of the conglomerate, DF Group, based out of British Virgin Islands, Bothli was to tap the rich heavy-mineral sands deposits in Srikakulam, Vizianagaram and Visakhapatnam districts. It was to invest big money in setting up production facilities.

Consideration

In a Government Order dated October 29, the Department of Industries and Commerce said: “After careful consideration it was decided that the earlier proposal to allocate the specific areas in the districts for mining to Bothli Trade AG is not approved and hence withdrawn.”

The deal

An MoU was signed by Suren Gevorgyan of OST-CHEM Group, Ukraine, on behalf of Bothli in the presence of the then Andhra Pradesh Chief Minister, YS Rajasekhara Reddy, and the AP Mineral Development Corporation (APMDC) in April 2006.

Bothli Trade AG was later allocated mining areas in three stretches. These included, 1,284 hectares in Kuppili, Kotaplaem and Mentada in Etcherla and Ranasthalam mandals of Srikakulam district; 1,050 hectares in Koyyam, Bouthala under Kodur in Vizianagaram district; and another 1,000 hectares in a contiguous stretch in the two districts.

The mining lease was to extract ilmenite and a dozen more products including zircon, rutile, magnetite etc. Bothli and APMDC were to form a JV for a mining and mineral separation plant. While the project would see an investment of about ₹4,500 crore, the then Government was informed that the annual turnover after completion of the final stage would be around ₹18,000 crore.

US Justice Department

Though, the project made very little progress on the ground level during the following years, an April 2014 indictment by the US Justice Department blew the lid over the international bribery scandal involving six rich and powerful men.

Those named included KVP Ramachandra Rao, a sitting Cong(I) Rajya Sabha MP, a powerful man during YS Rajasekhra Reddy’s tenure (2004-2009); Ukranian billionaire, Dmitry Firtash of Group DF, which owned many companies, including Bothli Trade; and Gajendra Lal, an Indian national and US citizen, allegedly close to YSR.

The scandal was exposed during the run up to General Elections and division of Andhra Pradesh. The revelation came in handy for the Telugu Desam Chief N Chandrababu Naidu, providing him ammunition to attack both the Cong(I) and YS Jaganmohan Reddy (YSR Congress).

Alleging the involvement of the YSR family and compliance of Ramachandra Rao, Naidu had vociferously demanded cancellation and an enquiry. With Naidu coming to power, it only seemed logical, that the entire project would be reviewed and scrapped.

Published on November 12, 2014

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