He also clamped a ban on transport of iron to other states. Yeddyurappa told reporters here that the ban will be in force till the completion of a state Lok Ayukta (ombudsman) probe into illegal mining in the last 10 years, between 2000 and 2010.
He had on Wednesday banned issue of permits for transporting iron ore for exports. The chief minister's decision comes against the backdrop of a raging controversy in the state over illegal mining and export of iron ore.
Between 2000 and 2010, over 30 million tonnes of iron ore was illegally mined and exported from Karnataka, according to data provided by Yeddyurappa to the state assembly. The Congress has dubbed it a 'scam of the century' involving up to Rs.600 billion (Rs.60,000 crore).
The Congress is on a march from Bangalore to iron ore rich Bellary, 320 kms away, demanding a Central Bureau of Investigation (CBI) probe into illegal mining. Bellary is the political base of Reddy brothers, powerful mine owners and ministers in Yeddyurappa's cabinet.
The Congress began the march July 25 and will reach Bellary Aug 9 for a rally. The party leaders and workers are walking 20 kms a day to cover the 320 kms in 16 days.
Yeddyurappa has rejected handing over the probe to CBI saying it will only delay the findings and credibility of the agency is in doubt.
The Congress and the other opposition party in the state Janata Dal-Secular alleged that the Reddy brothers are involved in largescale illegal mining and export of iron ore.
The Reddys, Tourism Minister G. Janardhana, his elder brother Revenue Minister G. Karunakara and younger brother and assembly member G. Somashekara have denied the charges.
The brothers, who own the Obulapuram Mining Company, Thursday launched 'swabhiman' campaign in Bellary to counter what they called Congress and JD-S attempts to malign not only them but the district also. Their loyalist, Health Minister B. Sriramulu on Wednesday tonsured his head and announced he will walk barefoot and eat only fruits till Aug 26 when senior BJP leader Sushma Swaraj is expected to visit Bellary.
The Reddy brothers and Sriramulu call Swaraj as their 'thayi' (mother). She had brokered a compromise in October-November last year when the Reddy brothers led a revolt against Yeddyurappa.
The Reddys became close to Swaraj when she contested the 1999 Lok Sabha election against Congress president Sonia Gandhi. Since then Swaraj has been visiting Bellary almost every year to perform 'Varamahalakshmi pooja' (worship of wealth goddess Lakshmi). The festival, a major one in Karnataka, this year falls on Aug 26.