BS Yeddyurappa of India’s main opposition Bharatiya Janata Party (BJP) quit as chief minister of the southern state of Karnataka in July 2011 after he was indicted in a mining scandal.
An anti-corruption report alleges the scam cost the exchequer more than $3bn (£1.8bn) between 2006 and 2010. Mr Yeddyurappa denies any wrongdoing.
Correspondents say illegal mining has been rife for years in Karnataka. The state produces about 45 million tonnes of iron ore a year and exports more than half of it to China.
The anti-corruption report on mining in Karnataka found that the promoters of privately-owned mining companies in the Bellary region – where most of the mines are located – paid off politicians, and then joined politics themselves, rising to positions in the state government.
These mining businessmen-turned-politicians exerted so much influence over the local officials that the Indian media began describing Bellary as a “new republic”.
In November last year, a report claimed that nearly half the iron ore exported from the western state of Goa was illegally mined.
A draft report from government auditors that was leaked in March 2012 estimated that India lost $210bn between 2004 and 2010 by selling coalfields to companies without competitive bidding.
But the Comptroller and Auditor General (CAG) said the draft report was still under preparation and “the details being brought out were observations which are under discussion at a very preliminary stage”.