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| Hutti Gold Mines seeks state nod for JV |
| Mahesh Kulkarni / Chennai/ Bangalore Jan 08, 2010, 00:00 IST |
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The state-owned Hutti Gold Mines Company Limited (HGML), the country’s lone gold mining company, has sought the Karnataka government nod for setting up a joint venture company for exploration and mining of gold and other precious metals in new areas in the state.
HGML presently operates the more than a century old gold mine at Hutti, about 480 km from Bangalore. It extracts about 3.5 tonnes of gold per annum.
The company, which has established the presence of gold, platinum and silver at several places in the districts of Chitradurga, Davanagere, Dharwad and Shimoga has filed application with the state government for mining and prospecting lease, said V Chandrasekar, managing director, HGML.
“We have already completed the survey of several places in these districts and studied 1,453 samples. As per the technical report, we have found 0.2-3.2 gm of gold per tonne of ore. However, the development of these mines require huge amounts of money and we want to carry out mining through a joint venture with private firms,” he told Business Standard.
It is learnt the government has constituted a cabinet sub-committee to look into the application of HGML for setting up a JV.
“Once the government gives its nod, we will float an expression of interest from private companies for a JV. As we do not have a large amount of funds we are exploring the joint venture route,” Chandrasekar said.
Already, six to seven companies including two from Australia have shown interest in exploring gold in Karnataka. They include Cluff Resources Pacific NL of Australia, Deccan Gold Mines Ltd, NMDC among others.
Meanwhile, the HGML has finalised a Rs 352 crore expansion plan, which includes extraction of gold below 2,000 feet at Hutti and installation of a new shaft with six-metre radius. The company has a cash reserve of Rs 361 crore.
The company has engaged the Ranchi-based Central Mine Planning and Design Institute for preparation of a mine plan for the second phase of mining at Hutti and tender documents for floating a global tender for the supply and installation of new shaft. The cost of new shaft is estimated at Rs 204 crore, M P Renukacharya, chairman, HGML said.
The shaft will be installed from the surface up to 1,000 metres below the earth, which will enable the movement of large number of workers. It will also help reduce the time required to move workers from the present two hours to less than one hour. The installation of shaft will be completed in four years, he said.
The installation of new shaft will enable the company to take up gold mining from 2,000 metres to 2,800 feet below the earth. HGML is also in the process of installing a Sag and Ball Mill along with other machinery to bring economy in energy consumption, reduce manpower utilisation and extract higher gold at Hutti at an investment of Rs 68 crore.
The company, which reported a net profit of Rs 93 crore during 2008-09, is aiming at a growth of 5.5 per cent during the current fiscal. Its turnover is likely to remain flat at around Rs 319 crore for the current fiscal.
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