Gold mines that have been shut for many years, including the famous Kolar Gold Fields, are likely to be revived as the government is looking at cutting down gold imports. The gold mines hold an estimated $2.1 billion worth of deposits left as the world's second-largest importer of the metal looks for ways to cut its trade deficit. India, the world's biggest gold importer behind China, spends more than $30 billion a year buying gold from abroad, making the metal its second-biggest import item after crude oil. India imports 900 tonnes to 1,000 tonnes per year, but local gold output is miniscule, at 2 tonnes to 3 tonnes per year.
State-run Mineral Exploration Corp has started exploring the reserves at Kolar Gold Fields in Karnataka, to get a better estimate of the deposits, Reuters said citing government officials. The government has also appointed investment bank SBI Capital to assess the finances of the defunct state-run Bharat Gold Mines, which controls the mines, the report said.
Balvinder Kumar, the top civil servant at the mines ministry, said getting the Kolar mines going would help the government bring down its import bill. Initial estimates show reserves worth $1.17 billion in the mines. Another $880.28 million in gold-bearing deposits is estimated left over in residual dumps from previous mining operations.
"These mines have huge potential," Kumar said, adding that the initial estimates were conservative. "We feel there is more. The whole belt has a lot of potential in terms of untapped gold."
The Kolar fields, located about 65 km (40 miles) northeast of the technology hub of Bengaluru, are among the world's deepest gold mines. Mining was started there by John Taylor and Sons, a British engineering firm, in 1880, when Britain ruled India. The area, now mostly a ghost town, still has the colonial-era clubs, houses and even a golf course that were built for its executives.
The government took over Kolar soon after independence in 1947, but struggled to profitably mine the reserves. In 2001, Bharat Gold was forced to cease operations due to mounting losses.
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