(Repeats item issued late Wednesday, with no change to text)
* To auction two new mines starting March - mines secretary
* To reopen Kolar mine that was shut down 15 years ago
By Krishna N. Das
NEW DELHI, Feb 17 (Reuters) - India is planning to auction
at least three gold mines in 2016, a top government official
said, opening up the sector to private firms for the first time
ever in a bid to slash imports of the metal that cost the
government $36 billion last year.
Economically crippling shipments of up to 1,000 tonnes of
gold, accounting for about a quarter of India's annual trade
deficit, have already prompted the government to hike import
duties and launch a scheme aimed at mobilising a pool of over
20,000 tonnes of the metal lying idle in homes and temples.
But still the government has failed to curb imports by the
world's second-biggest consumer, where gold is regarded as the
highest form of gift for gods and humans alike. The absence of
local production has scuppered efforts further.
India now plans to auction at least three gold mines in 2016
with billions of dollars worth of estimated reserves, including
Kolar in the southern state of Karnataka that was shut 15 years
ago on high costs, Mines Secretary Balvinder Kumar told Reuters.
Kumar said several local and multinational companies had
shown interest in the mines, but declined to identify them.
"We're importing so much of gold, so a lot of people are
interested," he said. "That goes without saying."
Local media reports say Indian billionaire Anil Agarwal's
Vedanta Resources VED.L and mining major Rio Tinto (L:RIO) RIO.AX
could be interested in the auctions.
A Vedanta spokesman said the firm has previously shown an
interest and was waiting for more details from the government,
while Rio Tinto's India head, Nik Senapati, did not immediately
respond to a request for comment.
Of the mines to be auctioned, two are new and located in the
eastern states of Jharkhand and Chhattisgarh, with combined gold
ore reserves estimated at up to 3 million tonnes, Kumar said.
The Chhattisgarh mine will be auctioned next month, he added.
Gold ore typically yields 0.0005-0.001 percent of primary metal.
As for Kolar, steel and mines minister Narendra Singh Tomar
has cleared a proposal to restart production there and has
written to Karnataka's chief minister regarding this.
ABANDONED MINE
Kolar has been a gold mining centre for centuries.
Post-independence, it was run by state-controlled Bharat Gold
Mines Ltd (BGML) until its closure in 2001. It is still
estimated to have up to 280 tonnes of gold to recover in dust,
open pit and underground reserves. (reut.rs/1Xx1kqG)
India is hoping to raise more than 60 billion rupees
($876.11 million) by selling gold dust from Kolar, Kumar added.
New Delhi has also promised to take over liabilities in the
form of bank loans and employee costs owed by BGML, he said.
Analysts believe gold mining will be profitable in India,
where prices MAUc1 have jumped more than three fold in a
decade versus an 89 percent rise in global spot prices XAU= .
Weak world prices have prompted top producers such Canada's
Barrick Gold Corp ABX.TO and Goldcorp Inc G.TO , Newmont
Mining NEM.N from the United States and South Africa's
AngloGold Ashanti ANGJ.J to cut costs.
"Any gold production in India is great news and maximising
mining is the way forward," said Rajesh Khosla, head of
MMTC-PAMP India, the country's biggest gold refiner.
"There would be a lot of interest from foreign companies
that have the latest technology."
($1 = 68.4843 Indian rupees)
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India asks banks to make the best of sovereign gold bonds
ID:nL8N14Y45N
India targets temple gold hoard to rescue monetisation plan
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