Kolar may see another gold hunt

January 19, 2009

Commodity Online
BANGALORE: The world’s mad rush for gold is forcing mining companies to put in a lot of money in new mining opportunities.

This trend may help India also. India’s famed Kolar gold fields have been lying idle or years now as mining from this fields was not profitable anymore. However, the new surge in gold prices and rising demand for the yellow metal may help the government revive the Bharat Gold Mines (BGML), which was facing liquidation following the closure of the mines.

The company was closed in 2001 when gold prices fell below the cost of extracting the metal, and mining operations at its Kolar gold fields (KGF) were outsourced.

Following the rise in gold prices, the company is now planning to invite tenders from global companies to resume operations at the mines.

However, the company which wins the bid should have cutting edge technology to extract gold from this mines, which are very deep.

The company has already prepared a bid document for the revival. Since BGML is in liquidation, the company is awaiting approval from the Karnataka High Court to invite global bids. With gold prices ruling at 3-4 times the 2001 levels, it makes sense to restart the company.

In 2001, BGML was liquidated as the cost of producing the metal at Rs 14,000 per 10 gm was more than three times the price of gold, then ruling at Rs 4,000 per 10 gm. In seven years, things have changed dramatically for gold.

In early 2008, global production costs rose to $400-500 an ounce, while prices were in the vicinity of $1,000.

The winning bidder will have to bring in cutting edge technology for deep underground mining. At 3,200 metre, Kolar’s Champion Reef mine was the second deepest in the world.

A potential mining partner also needs to be adept at extracting gold from the dumps of mine tailings, some of which are over 100 years old. The bidder also needs to have experience of smelting technology.

There are only about 5-10 global mining companies — from Russia, South Africa, Australia and Canada — that possess the right mix of technology to make BGML spring back of life.

To buy Hallmarked 999.9 Pure Swiss Gold Bars, Gold Bullion, Gold Ingots & 916 Gold Coins in Singapore or convert your 916 Physical Gold to physical 999.9 Pure Swiss Gold Bars, Click on Buy Gold to find out more. You may Sell Gold to us too.

[ Back To Home ]

[ Site Map ] [ Terms & Conditions ] [ Disclaimer ] [ Contact ] [ How To Link To Us ] [ Gold Directory ]

Buy Gold & Sell Gold - Singapore Gold Bullion Dealer