KOLAR GOLD FIELDS MINES TO BE REVIVED AFTER NEARLY TWO DECADES, IS IT FEASIBLE?

 

The mining operations at Kolar Gold Fields were shut down in 2001 as the public sector mining company was incurring huge losses.

Nearly two decades after the gold mines shut down in Kolar, the Union government has decided to revive the mining operations. On Wednesday, Union Minister for Mines, Pralhad Joshi announced that the Union government has decided to revive Bharat Gold Mines Limited (BGML), the public sector company, which was in-charge of gold mining operations in Kolar Gold Fields. 

The Union government has charged the Minerals Exploration Corporation Limited with conducting a feasibility study, to re-evaluate whether mining operations are feasible and to analyse whether reviving the mines can be turned into a profitable venture by using new technologies. Sources with MECL said that a preliminary feasibility study was submitted to the Union Ministry of Mines in August this year. Senior officials with the Department of Mines and Geology in Karnataka said that Pralhad Joshi and Chief Minister BS Yediyurappa had discussed the issue in late August and had decided to revive the mining operations as the study had indicated profitable operations. 

“A lot of water has accumulated in between and in order to drill deeper, we would have to suction the underground water, which is not only inadvisable keeping in mind the environmental factors but the cost of extracting the ore would also be higher. We have identified a few areas but we are still in the process of identifying the type of gold vein and the movement in areas where shallow mining activity had taken place,” the MECL official said. 

Officials with the Department of Mines and Geology said that southern and south-eastern regions like Chikkaragunta of KGF have been identified as feasible areas for mining. Shanmukha, the department official in-charge in KGF, told TNM that one of the reasons why mining operations shut down on February 28, 2001, was due to lack of adequate technology to optimise the cost of mining. Besides, the gold extracted from KGF was sold exclusively to the Reserve Bank of India at rates less than the market value, which had rendered the operations unprofitable. 

“The gold mining activity became unprofitable 11 years before the mines were shut down. The recurring losses and lack of technology to optimise costs was becoming a burden on the taxpayer,” he said.