Andhra mine promises gold output at scale as private sector enters mining

Andhra Pradesh Chief Minister N Chandrababu Naidu inaugurated a ₹405 crore gold mining and processing project in Kurnool district on Wednesday, marking an important step in a country that is a massive consumer of the yellow metal, without producing much of it. 

Located across three villages — Jonnagiri, Erragudi and Pagidirayi — the project, called the Jonnagiri Gold Mine, is India’s first commercial-scale private-sector gold mining operation. 

Spread across nearly 598 hectares, Jonnagiri Gold Mine is expected to produce up to one tonne of refined gold every year at peak capacity for its estimated life of around 15 years.  This can potentially plug a huge gap — Indians buy between 700 kg and one tonne of gold per year, almost all of it imported. 

Jonnar’s current certified gold resources stand at approximately 13.1 tonnes, with exploration indicating the potential for larger resources across the broader mineral belt. 

Developed by Geomysore Services India Pvt Ltd, a gold exploration and development company and Deccan Gold Mine, and backed by Lloyds Metals and Energy and Thriveni Group, the mine brings commercial-scale gold production back to India for the first time since independence. 

B Prabhakaran, managing director and chairman, Lloyds Metals and Energy, said, “Jonnagiri Gold Mine marks the beginning of a new chapter for India’s gold mining industry. For decades, India has been one of the world’s largest consumers of gold while remaining heavily dependent on imports. Today, we are demonstrating that India can discover, develop and operate world-class gold mining assets at commercial scale.” 

“Our vision extends beyond a single project. We aim to build a sustainable domestic gold ecosystem that supports economic growth, generates employment, contributes to national resource security and positions ‘Made in India’ refined gold in both domestic and international markets.” 

The inauguration comes at a time when gold prices are at historic highs and market volatility remains elevated. On Wednesday, the prices in India stood at ₹14,433 per gram for 24 carat gold, ₹13,230 per gram for 22 carat gold and ₹10,825 per gram for 18 carat gold. In such an environment, the development of a domestic source of gold is not only commercially significant but also strategically important for India. 

The project is also expected to generate employment, support local businesses and contribute to the regional economy through investment, royalties and taxes, the firm said. 

The mine is expected to encourage further exploration and investment in gold. 

According to industry sources, though one small private gold mine started production in Jharkhand after Independence, its output was insignificant and irregular. 

Chief Minister Naidu, who described the project as marking the beginning of a “golden chapter in the history of Andhra Pradesh, said, “Every district in Rayalaseema is being developed industrially. Massive investments are coming in sectors such as space, aerospace, defence, electronics, automobiles, steel, cement and clean energy. India’s largest Drone City is being established in Kurnool,” he said. 

Prime Minister Narendra Modi last month urged Indians to stop buying gold as a temporary measure to help conserve foreign exchange in the backdrop of the West Asia crisis.