Mining mafia or Robinhood? B Prabhakaran is accused of illegal mining worth Rs 900 crore in Odisha
MEERA MOHANTY, ET Bureau Mar 12, 2012, 12.32AM IST

NEW DELHI: Earlier this year, when Posco, the world`s third-largest steel company, started parleys to secure iron ore for its upcoming steel plant in Odisha, it called on B Prabhakaran - a man who owns no mines in the state, but has his hand in many. This is also a man who is equally reviled and revered in Joda, Barbil and Koira, the three mining circles of Odisha that till recently accounted for a third of India`s iron ore production.

Some of those detractors were present at a tense and acrimonious public hearing in December in Keonjhar town, where a seven-member central panel investigating illegal mining of iron ore and manganese across the country made a stop. Villagers, journalists, activists, and state BJP and Congress leaders badgered the commission with requests to catch the "real thief".

More often than not, they were referring to the 38-year-old Prabhakaran, the managing director of Thriveni Earthmovers. They call him the `Reddy of Barbil`, the reference being to G Janardhan Reddy, the main accused in illegal mining in Karnataka. In Odisha, Prabhakaran is the successful outsider, with influential patrons in the state capital and a company that was valued at 1,250 crore when private equity firm Samara Capital bought 12% in it in 2010.

"I am just a contractor working the mines," says Prabhakaran. But it is alleged - in whispers for many years and, since 2009, also alluded to in a formal complaint by the state - that Prabhakaran makes mine owners effectively transfer control to him, which is illegal. More damningly for him, the state has accused Thriveni of doing illegal mining worth 900 crore.

In contrast, many locals who work the mines see Prabhakaran more generously. He may be a Tamilian, but he`s also the contractor who helped them buy trucks, who fed them business from the mines and eventually made them co-owners in his company. "We were impressed with Thriveni`s strong voluntary focus on improving the condition of the local community," says Gautam Gode, co-founder and managing director, Samara Capital.

Prabhakaran`s Meteoric Rise

Mr Prabhakaran is one of the most passionate and visionary entrepreneurs we have ever backed," says Gode.

When ET met him in December, the Salem-born Prabhakaran was on his way back from the Kamakhya temple in Assam, a yearly ritual he never skips. He comes accompanied only by his driver. He is consistently polite, as Bellary`s Reddy is supposed to have been in public. And humble, if you can ignore the iPad, the Cartier spectacles, and a small Beechcraft C 90 plane parked somewhere on a lonely miners` runway, and a small coal block in Indonesia.

His rise in Odisha has been meteoric. When he started out, in 1993, Prabhakaran had one excavator and two tippers. By the time he got to Odisha in 2001, he had been a contractor on large projects for Hindustan Copper, India Cements and L&T. He won his first contract in the state from the Orissa Mining Corporation, but it never took off.

Soon after, he convinced a mine owner, RP Sao, to try him out. As business grew, along with cultivating relationships in high places, Prabhakaran also built strong relationships on the ground. In the process, he cracked the code for infrastructure and mining projects. When he came to Odisha, he set up base, as he says, "not in Joda or Barbil, but at this halfway point in Badrasahi, to be closer to the locals".

Rival miners say he won over powerful local leaders who mobilised workers, such as Sanna Mahakud and brothers Bheema and Kusha Apad, with vehicle loans and small contractual jobs. "These men controlled labour deployment for Thriveni, ensuring that it was their men who worked the mines," says a mine owner, not wanting to be identified.

Ever since the state has started cleaning up its mess, it has forced the miners of Odisha, some of the country`s largest, into bumbling defensiveness. And pushed Prabhakaran into a lonely spot.

Contractor or Miner?

In the context of illegal mining, Prabhakaran`s name crops up on two occasions. He is a contractor to half-a-dozen mines in the state. In September 2011, the state issued showcause notices to the owners of three of those mines - Indrani Patnaik, KJS Ahluwalia and RP Sao - for violating Rule 37 of Mineral Concession Rules and practically transferring their mines without prior government approval. The sub-text of those notices is that the mines were transferred to Prabhakaran.

The state contends that the miners entered into a profit-sharing arrangement with Thriveni. "There has never been any profit sharing," says Prabhakaran. "All I have asked for is 15% over cost, which can translate into 35-40% of revenues, but not of profit." In 2010-11, he adds, Thriveni, which is an unlisted company, posted a net profit of Rs 130 crore; this year, with the current clampdown, it will "scrape through".