(Reuters) – Seven shots rang out at a wedding reception in this sooty city in eastern India, and Suresh Singh, India’s “Coal King”, fell fatally wounded.

He was a wealthy coal trader, a politician and, police say, a crime boss. At the time of the shooting, Singh had 14 criminal charges against him, including one for homicide. His career and murder are emblematic of one of India’s most nagging economic problems: the corruption that cripples the crucial coal industry.

The shooting was the latest gangland killing between rival coal clans, both with the surname Singh. They have fought for years to control rackets that prey upon the coal industry in the impoverished state of Jharkhand in eastern India, home to some of the nation’s biggest mines. The rackets include controlling unions and transport, manipulating coal auctions, extortion, bribery and outright theft of coal. Popularly known as the “coal mafia,” their tentacles even reach into state-run Coal India, the world’s largest coal miner, its chairman told Reuters.

On a series of trips to the region, Reuters found widespread plunder in India’s coal country that contributes substantially to chronic shortages of a commodity fuelling over half the power generation in Asia’s third-largest economy.

It is a murky subculture that entwines the coal mafia, police, poor villagers, politicians, unions and Coal India officials. Coal workers pay a cut to crime bosses to join their unions, which control access to jobs, according to law-enforcement and industry officials. Unions demand a “goon tax” from buyers, a fixed fee per tonne (1 metric ton = 1.102 tonnes), before loading their coal. Buyers must bribe mining companies to get decent-quality coal. The mafia pays off company officials, police, politicians and bureaucrats to mine or transport coal illegally.

In a startling admission, Coal India Chairman S. Narsing Rao said he knows some of his officials are involved in stealing coal but his company can’t control what happens once trucks leave the mine gate.

“Obviously it happens with the connivance of our own guys, in collusion with our own guys,” he said in an interview.

Rao estimated the scams cost his company, which has a near-monopoly, about 5 percent of its 450 million tonne annual output. Two senior police officials in Jharkhand said the real figure is between a fifth and half the production at some mines.

Corruption, crime and waste in the economy exact a heavy toll on the economy. Recently built power stations stand idle across India, mainly for lack of coal. Last July, the world’s most severe blackout shut off power in half of India, home to 1.2 billion people.

Increasingly, power companies are turning to imports as domestic output lags demand. Yet India sits on the world’s fifth-largest coal reserves, which the government says could supply the nation’s energy needs for decades. Coal imports have tripled in a decade to some $1.5 billion a year. The International Energy Agency expects imports to rise faster in India than anywhere else, as consumption overtakes that of the United States by 2017.

National political leaders promise action – but at the same time throw up their hands.

Coal Minister Sriprakash Jaiswal said in an interview that the Central Bureau of Investigation, akin to the U.S. Federal Bureau of Investigation, was taking a larger role in tackling the mafia, but emphasized it was mainly up to state governments to tackle crime.

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