State-owned NMDC Wins E-Auction for Indian Gold Mine

SEATTLE (Scrap Monster): The state-owned NMDC Limited has emerged as the winner in the e-auction held for a gold mine in Chitoor district in the southern Indian state of Andhra Pradesh.

This is the first time that a state-owned company has won the bid for developing gold mine. NMDC Limited emerged the highest bidder, beating notable private sector players including Adani Enterprises and Vedanta Resources. NMDC will be notified as the bid winner sometime next week. The company is expected to make an initial investment of around $58.3 million in developing the project.

According to sources, NMDC Limited will be granted a 50-year lease period to operate the mine. The mine site extends for 263.01 hectares and is estimated to have reserves of at least 1.83 million tonnes containing 5.15 grams of gold per tonne. The total recoverable gold content is estimated at around 8.5 tonnes. The company will offer 38.25% revenue sharing on sale value to the government.

The project is awaiting environmental clearances and other necessary permits to operate. Upon completion of the customary regulatory approvals, the company will enter into agreement with the state government in developing the underground gold mine. As per estimates, it may take almost two years for the mine to report first production.

Of late, NMDC has been involved with gold mining in Tanzania and Australia through its subsidiaries. The newly announced project in India would be the company’s first gold mine development project in the country.