Hyderabad: The State Government on Monday cancelled the mining lease of Rakshana Steels with Andhra Pradesh Mineral Development Corporation for exploration of iron ore in Bayyaram and other mandals in Khammam district.

It may be mentioned that Rakshana Steels was backed by Brother Anil Kumar, son-in-law of former chief minister Y S Rajasekhara Reddy.

The government while scrapping the mining leases, asked the APMDC to cancel all agreements in connection with exploration of iron ore.

Earlier, the Centre too cancelled its earlier approval given to the APMDC for exploration of iron ore in Bayyaram and other mandals in Khammam district.

The Centre had earlier reserved 1.41 lakh acres of land in favour of APMDC in Bayyaram, Garla and Nelakondapally mandals in Khammam district for exclusive exploration covering survey and investigation of mineral bearing areas.

However, there was a huge political outcry when opposition parties demanded cancellation of the mining lease on the ground that Rakshana Steels was backed by Anil Kumar, YSR's son-in-law.

However, the management of the company denied the charges. A senior official, when contacted, confirmed that the Ministry of Mines had cancelled the lease.

Meanwhile, the Telugu Desam Party and Communist Party of India has hailed the State Government's decision over scrapping of mining leases and appealed to the government to supply ore to steel plants run by the government.