In a major decision aimed at reviving the defunct Bharat Gold Mines ltd (BGMl), the Mines Ministry has decided to float global tenders to sell physical assets (mainly land and infrastructure in terms of buildings and machinery) of the State-owned entity to help begin operations there. The company had stopped operations in 2001 after gold reserves in its mines had reached a critical level.
Sources privy to the development told The Pioneer that the global tenders would be floated within the next six to eight months once the valuation of the company’s assets is completed. A decision regarding issuance of tenders was taken in a meeting conducted by Mines Secretary R H Khwaja recently. Among the key assets of BGMl are underground mines with gold deposits below 3000 metres, approximately 12,000 acres of land, dumps containing around 90 tonnes of gold (as per a study conducted in 1999), machinery required for mining operations, 5,000 residential houses and a township infrastructure with closed hospital and schools.
According to official sources, the Government is keen to revive the public sector undertaking (PSU), and the general sentiment within it is that inviting global players to run the BGMl mines could be fruitful for the company in the long run as their expertise and machinery as well as better technological know how may help in increasing the output of the reserves situated there. Prior to the floating of tenders though, the valuation of the physical assets of the company would be done, which sources said could run to thousands of crores of rupees.
Sources added that selling of assets was part of the company’s revival plans. Of the company’s assets, the Government mainly plans to sale out physical assets like buildings, land, and old machinery, which would pave way for state of the art assets which would be brought in by the global players for running the BGMl mines. The decision by the Mines Ministry to float global tenders has been taken after the Supreme Court in its July 9, 2013 directive asked it to do so.
The Union Cabinet in 2006 had okayed a decision to invite global tenders to revive BGMl, but as its employees had gone to court against the company’s closure in 2009, the matter remained in cold storage. With the Supreme Court last month having given its green signal to the Centre’s plan to float global tenders for reviving BGMl, sources expressed hope that this could be a new chapter in the history of the entity.
Globally India is the leading consumer of gold and it has 9 per cent of global reserves of the metal, estimated to be around 14,000 tonnes. However owing to slow policy measures, explorers have complained of waiting for years to get even the prospective lease for exploring the actual reserves situated in a gold mine.
The Kolar mines are said to be one of the world’s deepest reserves of gold. Initially called the Kolar Gold Fields (KGF), they were nationalised in 1956 and handed over to State-run BGMl. These gold mines were however shut down in 2001 after around 120 years of operations, as the levels of the precious yellow metal reached critical levels and the costs of operations too had become uneconomical.