The Enforcement Directorate Wednesday conducted fresh raids in the ongoing money-laundering investigation into alleged illegal mining in Jharkhand and recovered two AK-47 assault rifles and 60 bullets, official sources said.

The two weapons, 60 live rounds and two magazines were found at a home in Ranchi and the sources identified the premises to be linked to a person called Prem Prakash, who is stated to be involved in the case.

The federal probe agency is raiding about 17-20 premises in Jharkhand, neighbouring Bihar, Tamil Nadu and the Delhi-NCR as part of the operation.

The searches were carried out after fresh information came to the fore following the questioning of Pankaj Mishra, a political aide of Jharkhand Chief Minister Hemant Soren, and Mishra's associate and muscleman Bachhu Yadav, the sources said.

Mishra and Yadav and have been arrested by the ED in this case earlier.

BJP's Godda MP Nishikant Dubey said in a tweet that Prakash is an "associate of Jharkhand CM and his family friend Amit Agarwal" and that his (Prakash) links should be investigated by the NIA.

Saryu Roy, a former BJP leader but now an independent MLA from the state, wrote on his Twitter handle that it should be investigated as to how Prem Prakash obtained the AK-47 rifles and that there is a possibility that this has a terrorist link.

The ED probe began after the agency raided Mishra and his alleged associates on July 8, covering 19 locations in Sahibganj, Barhet, Rajmahal, Mirza Chauki and Barharwa in Jharkhand in the case linked to alleged instances of illegal mining and extortion.

The searches were launched after the ED filed a case under the Prevention of Money Laundering Act (PMLA) against Mishra and others in March, alleging that the former "illegally grabbed or amassed huge assets in his favour".

Soon after the July raids, the ED seized funds amounting to Rs 13.32 crore lying in 50 bank accounts.

"The evidence collected during the course of the investigation, including the statements of various persons, digital evidence and documents, revealed that the seized cash or bank balance is derived from illegal mining being rampantly done in the Sahibganj area, including the forest area," the agency had said.

It had said it was probing the trail of Rs 100 crore of "proceeds of crime" generated from illegal mining operations in Jharkhand.