Vedanta bags India's first gold mine auction

Vedanta Ltd has won India's first-ever auction of a gold mine, a provincial government official said, as the nation opens up the sector to private companies to curb overseas purchases of the metal that cost it $36 billion last year.

Vedanta, a unit of London-listed Vedanta Resources, beat three other bidders in the auction of the Baghmara mine in the eastern state of Chhattisgarh, the head of the state's directorate of geology and mining, Reena Kangale, told Reuters on Saturday.

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• Vedanta wins countrys first gold mine auction in Chhattisgarh

The company quoted the highest bid of 12.55 per cent of the Indian Bureau of Mines price of Rs 74,712 ($1,087) a troy ounce, Kangale said, adding she expected mining for potential reserves of about 2,700 kg to begin in two years.

A troy ounce is equivalent of 31.10 grams.

In a statement, Vedanta said the block measuring 6.08 sq km required extensive exploration and that the process would commence in "due course".

India's insatiable appetite for gold has already prompted the government to raise import duties and launch a scheme aimed at mobilising a pool of over 20,000 tonnes of the metal lying idle in homes and temples.

Still the government has failed to curb imports by the world's second-biggest consumer, where gold is regarded as the highest form of gift for gods and humans alike.

The absence of local production has scuppered efforts further.

Federal Mines Secretary Balvinder Kumar last week told Reuters the government planned to auction at least three gold mines in 2016.