India looks to revive abandoned Kolar gold mine

NEW DELHI (Scrap Monster): The Indian government is looking at all possible options to restart gold mining operation at the abandoned Kolar Gold Fields in the southern state of Karnataka.

Earlier in end-2015, the Mines Ministry had forwarded a proposal before the union cabinet to revive some of the oldest and deepest mines in the country. In April, Australian miner Citigold Corporation Limited has announced that it has signed a Memorandum of Understanding (MOU) to partner with a consortium to acquire the assets of Bharat Gold Mines Limited (“BGML”). The assets principally comprise mining leases, land and plant in the heart of the Kolar Gold Fields. The consortium members include Pan India Network Infravest Limited- part of Indian conglomerate Essel Group.

Started by a British firm in 1880, Kolar Gold Fields under the ownership of Bharat Gold Mines Limited (BGML), was closed down in the year 2001, after the company declared that heavy extraction for a long period has lead to the exhaustion of gold ore reserves in the mines. Nearly 800 tonnes of gold was extracted from these mines. The closure followed the company’s assessment that mining the remaining reserves would run up in losses. The decision left nearly 3,100 jobless.

The Karnataka State High Court had earlier in its ruling directed the Indian government to take responsibility of reviving the abandoned mine. Later, the Supreme Court had allowed Central government to float global tenders to revive mining operations at the mine.

The resumption of gold mining operations at Kolar Gold Fields will help the country to meet at least a part of the rising gold demand. Currently, most of the domestic gold demand is met through imports. The revival of the mine could help India cut its gold-import bill substantially.

The Kolar Gold Fields, 110 kilometres away from the City of Bangalore is believed to be one of the largest gold reserves that has more than 200 tons of the precious metal in its depths.