India May Open Old Gold Mines 2 Billion in Reserves
India is planning to revive a cluster of colonial-era gold mines – shut for 15 years but with an estimated $2.1 billion worth of deposits left – as the world’s second-largest importer of the metal looks for ways to cut its trade deficit, officials said.
State-run Mineral Exploration Corp Ltd has started exploring the reserves at Kolar Gold Fields, in the southern state of Karnataka, to get a better estimate of the deposits, according to three government officials and a briefing document prepared by the federal mines ministry that was seen by Reuters.
The ministry has also appointed investment bank SBI Capital to assess the finances of the defunct state-run Bharat Gold Mines Ltd, which controls the mines, and the dues the company owes to workers and the authorities, said the officials, who are involved in the process.
The Kolar fields, located about 65 km (40 miles) northeast of the technology hub of Bengaluru, are among the world’s deepest gold mines.
Mining was started there by John Taylor and Sons, a British engineering firm, in 1880, when Britain ruled India. The area, now mostly a ghost town, still has the colonial-era clubs, houses and even a golf course that were built for its executives.
India took over Kolar soon after independence in 1947, but struggled to profitably mine the reserves. In 2001, Bharat Gold was forced to cease operations due to mounting losses, the result of a large, unproductive workforce and dated, economically unviable methods of mining.
Over the next 15 years, successive federal and state governments have tried to revive the mines or to sell them off, often disagreeing on the course of action and taking their disputes to the courts.