Wealth underground. Centre to soon auction Kolar gold mines, likely to fetch ₹30,000 crore

The Centre has decided to revive gold mining, auction tailing dumps and two blocks at the Kolar fields in Karnataka more than 22 years after it was shelved because the extraction of metals and minerals had become unviable.

According to an official estimate by the Nonferrous Materials Technology Development Centre (NFTDC) — the R&D arm of the Ministry of Mines, the extracts from Kolar gold fields mining (gold and minerals like palladium and rhodium) are likely to fetch a value worth ₹30,000 crore. The mines situated in Karnataka’s Kolar district are owned by Bharat Gold Mines Limited (BGML).

The move is part of a larger exercise wherein six gold mines have already been auctioned by the States in the last five years under the provisions of Mines and Minerals (Development and Regulation) (MMDR) Act, 1957.

Huge reserves

Explorations done by the Mineral Exploration and Consultancy Limited (formerly Mineral Exploration Corporation Limited) in 2018 revealed that block Mc Taggart possesses 1.044 million tonnes (mt) of gold resources with grade of 2.97 g/tonne. Similarly, 1.008 mt of gold resources with grade of 0.5 g/tonne lies in the other oriental block, a senior Ministry official said. Besides, BGML has 33 mt gold tailing.

The Ministry has gotten two studies done to ascertain resources in the tailing dumps. Reports by the Indian Bureau of Mines (IBM) and MECL indicate that tailing dumps alone have gold worth ₹6,237 crore, sources said. The Ministry is now exploring the possibilities of mineralising the resources there and monetising over 12,000 acres freehold land of BGML.

“The rich resource has remained unutilised for long and the effort now is to give it back to the people,” Farida Mahmood Naik, Joint Secretary in the Mines Ministry, told businessline while confirming the government’s initiative.

Explorations done by the Mineral Exploration and Consultancy Limited (formerly Mineral Exploration Corporation Limited) in 2018 revealed that block Mc Taggart possesses 1.044 million tonnes (mt) of gold resources with grade of 2.97 g/tonne

The way forward

Mines Secretary Vivek Bhardwaj had led a delegation of officials from the Centre and State governments to the Kolar mines on Wednesday to figure out an early solution for rolling out the process of gold mining and monetisation of the land along the Bengaluru-Chennai highway. Alternatively, rail network to connect the two metros will also give a fillip to the Centre's plan of having an industrial hub at the land, said sources.

Earlier, the Ministry had constituted a monitoring committee comprising chiefs of MECL and BGML and officers from the Geological Survey of India, IBM and the ministry itself to get a legal review, asset valuation and hiring of technical consultant for conducting a techno-economic feasibility report (TEFR) and management consultant to suggest the way forward. The empowered committee had gone into past hurdles such as inability to execute a 2006 Cabinet decision of selling BGML assets due to litigation. The erstwhile Board for Industrial and Financial Reconstruction (BIFR), which was a development finance institution of the Ministry of Finance, had issued an order on June 12, 2000, ordering to wind up BGML.

The move is part of a larger exercise wherein six gold mines have already been auctioned by the States in the last five years under the provisions of Mines and Minerals (Development and Regulation) (MMDR) Act, 1957.