To diversify into gold mining

MSPL is planning to diversify into gold mining later this year. The company has acquired gold mines at Mahalingapura village, about 20 from Gadag in north Karnataka. These mines, which were found originally by the Britishers in the early 20th century were later passed on to state-owned Bharat Gold Mines Limited and later to Hutti Gold Mines Ltd.

The company has planned an investment of Rs 550 crore for the proposed foray into gold mining. However, both the companies abandoned these mines for lack of sufficient quantity of gold and uneconomical prices for the yellow metal in the domestic market. Subsequently, MSPL has come forward to extract gold from these mines given the current high prices for gold in the local market.

“Meda Venkataiah, executive director-mining, MSPL Limited said, “We have already received reconnaissance permit from the state government to extract gold from these mines. We plan to extract around 2 tonnes of gold per annum here. At the current market prices for gold hovering over Rs 15,000 per 10 gram, it is economical to extract gold here. The breakeven point at this production rate for open cast mine is Rs 8,000 per 10 gram and Rs 14,000 when we dig into the underground mining.”