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Australian gold miners head for India

Paritosh Parasher, in Sydney

Australian miners have come together to form a company that will soon begin exploring for gold reserves in southern India.

Australians Indian Resources is poised to start exploration work north and south of India's only large gold mine at Kolar in Karnataka. Production halted at loss-making Kolar last year after the mine yielded gold for 120 years.

According to The Australian, this foray could trigger an unprecedented gold rush as the Indian government has so far kept a strict control over gold mining and has failed to exploit potential deposits.

If they succeed in their venture, the Australians would reap a rich harvest as India is the world's largest consumer of the yellow metal, buying an estimated 850 tonnes a year but producing only two tonnes.

Gold mining in India has been restricted to just a few mines in Karnataka and Andhra Pradesh. Due to strict government control, Indian gold reserves have been left largely unexplored since the British Raj ended in 1947.

The Indian government has cleared a proposal to close down Bharat Gold Mines Ltd at Kolar, which employed around 4,000 workers. While production at Kolar has stopped, the public enterprise is currently in the process of retrenching its workers.

The government was forced to order the company's closure as BGML was incurring losses since its inception in 1972. The ministry of mines failed to find a joint venture partner to revive the gold mine.

The loss-making entity's troubles multiplied because of a steep fall in international gold prices. The quality of the gold produced by BGML was also stated to be poor. High operational and overhead costs too made operations unviable.

The Australians are hoping to reverse this situation with their advanced mining techniques.

The Australian company would not restrict itself to exploring for gold in India as it also has licenses for chromite mining in the western state of Goa. It has stakes in nickel and platinum mining, besides plans to explore a potential zinc reserve in the western state of Maharashtra.

Charles Devenish, a renowned gold miner in Australia who is part of the Indian venture, is also reportedly trying to persuade other Australian mining companies to list on the Bombay Stock Exchange.

Indo-Asian News Service
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