Date | Oct 26, 2016:
In what may be a lifeline for Bharat Gold Mines Ltd (BGML), the government on Tuesday approved three gold exploration projects in the Kolar Gold Field (KGF) area of the defunct state run firm.
Previously known as Kolar Gold Mines, BGML is a public sector unit under the ministry of mines which ran into heavy losses and was eventually closed down in March 2001.
The mines ministry plans to expedite India’s gold exploration efforts with the state governments of Madhya Pradesh and Jharkhand putting up gold deposits for auction. India and China were the key countries dominating the global gold market in 2015, according to the World Gold Council, a lobby group.
“The Standing Committee on Promotional Projects (SCPP) approved three gold blocks for exploration in the KGF area of BGML. These blocks are to be explored expeditiously to decide the fate of BGML,” said a senior government official on condition of anonymity.
The exploration proposals cleared by the SCPP includes estimation of gold ore in BGML leasehold area which may be handed back to the closed company, said another government official, who also did not want to be named.
“State-owned Mineral Exploration Corp. Ltd (MECL) will undertake exploration work up to G3, or prospecting, level. Efforts are on to revive the company rather than selling it to private parties,” said the second official, adding that the company still exists as per the Companies Act as its assets have not been liquidated.
This comes at a time when the National Democratic Alliance government is also trying to revive three defunct urea units at Barauni, Sindri and Gorakhpur.
India’s total demand for gold jewellery, bars and coins increased by 6% year-on-year to 233.2 tonne in the fourth quarter of calendar year 2015 (October-December), according to the World Gold Council’s demand trends for 2015.
However, consumer demand for gold during the second quarter of this year (April-June 2016) fell by 18% to 131 tonne compared with 160 tonne in the year-ago period due to steep prices.
Around 15,390 metre of drilling is required in 80 boreholes in an around the KGF area, which will entail an investment of Rs.18.76 crore.
The largest gold reserve of BGML, KGF, lies in Kolar district of Karnataka. With the mining lease of KGF expiring in 2013, a renewal application has been filed.
Queries emailed to the spokespersons of the mines ministry and MECL on 25 October remained unanswered.
According to information available on the website of the mines ministry, even after 120 years of mining the value of the fields runs into a couple of thousand crore.
Experts too believe that KGF has potential to be revived.
“It’s been long since these mines have remained closed. Now, cut-off grades for gold is low and the dumps lying there may contain sizeable chunk of gold ore. This is a perfect case for reviving mining operations at BGML. However, if employees will have a say or it may be revived via state-run undertaking is a matter which needs to be seen,” said Dipesh Dipu, founder and partner at Jenissi Management Consultants, a Hyderabad-based energy and resources sector consulting firm.
Former mines minister Narendra Singh Tomar had also asked state exploration agencies to re-evaluate the dumps as well as the mines of BGML in order to determine the correct value of these mines.
(Source: http://infracircle.vccircle.com/)