"It is a matter of great concern for us. We are looking into the matter," said coal secretary Alok Perti, assuring appropriate action after receiving the report from the home ministry.
According to the report, prepared after a visit of senior home ministry officials to the area, insurgent groups such as the Nationalist Socialist Council of Nagaland (NSCN) are indulging in illegal mining at Namchik Namphuk, the only coal block allotted to the state government.
NSCN is an extremist group operating in Northeast India demanding a sovereign state called Nagalim.
Arunachal Pradesh Mineral Development & Trading Corp (APMDTC), which owns the block, estimates about 84 million tonnes high quality coal reserves in the open cast mine. A senior coal ministry official who did not wish to be named said such coal sells at about 3,500 per tonne.
The official also said that local members of Parliament and organisations such as the Akhil Bharatiya Adivasi Vikas Parishad have alleged involvement of officials of state government and APMDTC in the illegal trading.