Govt to invite bids for stake sale in gold mines

Vedanta Group, London-listed Kolar Gold among firms readying to grab mining opportunities in India

The government has decided to float global tenders to revive closed or unviable gold mines in India. For selling the assets of Bharat Gold Mines Ltd, a tender for investment bankers has been floated.

A few Indian mining giants, as well as global ones, are said to be preparing to grab the opportunity. Sources said Vedanta group, London-listed Kolar Gold and an Australian mining company were the leading entities interested in gold mining in India.

India’s gold reserves are estimated at 14,000 tonnes.

The government’s move follows a Supreme Court judgment asking the Centre to finalise global tenders to sell the assets of gold mines that were shut. Sources said at a later stage the government might consider selling unviable copper mines said to have gold reserves to private companies, through a global tendering process.

An official from the Department of Mines said, “The government has called for bids from service providers to manage the proposed sale and selection of a suitable bidder through a global bidding process for the assets of Bharat Gold Mines, which had abandoned operations in 2001.” The company has mines in Kolar Gold Fields in Karnataka, the Bisanatham mine and the Chigaragunta mine in Chittoor district and the Ramagiri mine in Anantapur district of Andhra Pradesh. These mines were shut in 2001.

The government had granted a lease to Bharat Gold Mines, which had sub-leased 1,109 acres of the 12,095 acres to Bharat Earth Movers. The sub-lease will expire in April 2014.

The Kolar belt in Karnataka and Andhra Pradesh is one of the largest gold reserves belt in the country. An industry insider said annually, 100 tonnes of gold could be mined from this belt, under strict supervision.

Speaking to Business Standard, Vedanta group chief Anil Agarwal had recently said, “The government should divest further in Kolar Gold fields and the Bharat Gold mine and hold 26 per cent. This should be done on a revenue-sharing basis. With today’s new exploration techniques, we will find a lot of gold and will be partially self-sufficient. Opening up of mining may interest a lot of foreign companies.”

Last week the Andhra Pradesh government had granted the Jonnagiri mining lease to Bangalore-based Geomysore Services India. Kolar Gold holds 30 per cent equity stake in Geomysore Services India.