India may hasten gold mining plan as means of curtailing trade deficit

Section:

Government Digs Up Gold Mining Proposal; Extraction Likely by End of 2016

By Vikus Dhoot
The Times of India, Mumbai
Saturday, November 1, 2014

http://economictimes.indiatimes.com/industry/indl-goods/svs/metals-minin...

NEW DELHI, India -- The government is considering a proposal to allow a private company to commercially extract gold from Ganajur gold mines in Karnataka, one of the largest known gold deposits in the country, as it looks at ways to step up production and curb the galloping trade deficit.

The commerce ministry has pushed for fast-tracking the project, being developed by the BSE-listed Deccan Gold Mines Ltd, and the mines ministry is taking a fresh look at the mining lease application.

"The mines ministry has informed the cabinet secretariat that it is taking a fresh view on the mining lease for Ganajur," said a senior government official aware of the development.

... Dispatch continues below ...


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"The ministry will firm up its stance on the issue by mid-November," the official added. The mining lease application is pending since 2010.

India's largest gold mine at Kolar, which had yielded gold since the Indus Valley civilization era, was shut down 13 years ago and plans hatched under the UPA to revive it have come to naught. In 2009 the Karnataka government had granted a prospecting licence for the Ganjur project that includes a 2,000-tonnes-per-day gold ore processing plant and recommended the mining lease to the Centre a year later.

The mines ministry sought several clarifications from the state and the developer, but had held back mining lease.

No new gold mining capacity has come up in the country in the intervening period, with production from the three existing mines at Hutti, Uti, and Hirabuddini, hovering around 2.8 tonnes a year. Commercial extraction of gold at the mine could start by the end of 2016 if mining nod comes through soon. About 308,000 ounces or a little less than 9 tonnes of gold, are expected to be tapped at Ganajur's first mine, from around 1.5 million tonnes of gold ore.

Deccan Gold Mines managing director Sandeep Lakhwara told investors recently that the Ganajur project could be expedited in the greater public interest by the NDA government. "Minister of State and Commerce Nirmala Sitharaman has talked about eight projects that would be followed up in the greater public interest and I am happy to say that Ganajur fits into one of those ... that have been notified for fast tracking by the minister," Lakhwara said in a conference call on September 25. "So it should therefore certainly receive better attention than it has been receiving earlier."

The firm said it expects the mines ministry to process its application soon, following which it will apply for environmental clearances and hopes to begin commercial production by end of 2016. Indians' insatiable appetite for the yellow metal pushed up the country's trade deficit to an 18-month high of $14.2 billion last month.

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