Vedanta looking to expand into gold mining, eyeing Kolar mines
New Delhi: Vedanta Resources, the natural resources conglomerate, is now eyeing expanding its footprints into gold mining and looking at bidding for now closed Bharat Gold Mines Ltd (BGML), which owns famous Kolar gold mines in Karnataka.
Vedanta Chairman Anil Agarwal told the agency that the government should begin the process of selling the assets of BGML "as quickly as possible" as the Supreme Court has already approved the asset sale plan.
"Supreme Court has given order to the Mines Ministry, they should do it as quickly as possible. Foreign investors should come to India. Instead of importing gold, we should be producing. If anything comes, we should look at this opportunity," he said.
When asked whether he will bid for BGML assets, he said, "I am in that business... We will definitely do the due diligence, it will depend on the right price, right due diligence. If some body outbids us, then it will go to them but certainly we will look at it."
Kolar gold fields were once considered one of the largest gold fields in India and mining here used to happen for centuries. It was nationalised in 1956 and in 1972, its operations were handed over to BGML.
However, it was closed in 2001 due to mounting losses and depleting reserves, rendering over 3,000 employees jobless. The BGML employees, opposed to closure, had challenged it in various courts.
In June, the Supreme Court had approved government's plan of floating a global tender for selling the assets of BGML, so that the Kolar gold mines can be restarted.
During the Monsoon session of Parliament, the government had told Lok Sabha that it is planning to float a global tender for selling assets of the BGML but did not give any timeline and other details related to the proposed tender.
Few days back, the Mines Ministry -- the parent ministry of BGML-- had invited bids for appointing consultants for selling the BGML assets. The bids have to be submitted by October 9.
The consultant's tasks include preparing documents like request for proposal and memorandum of understanding, determining reserve price for the sell, and selection of successful bidders, among other things.
Currently, India has only three producing gold mines -- Hutti, Uti and Hirabuddini mines and the domestic production has almost stagnated at about 2.8 tonnes annually.
Industry players have been saying for long that India needs to increase its gold production to reduce ever rising gold imports bill. The rise in production will also help the government in containing the current account deficit to some extent. For that, they say, government needs to give mining license to about 40 mines where prospecting has been done.