Amidst the ongoing case against the liquidation of the Bharath Gold Mines Ltd. (BGML) in Karnataka High Court, the Union government has initiated tender process to extract residual gold from tail dumps (processed ore), mounds of which are lying in the Kolar Gold Fields.
The move comes over two decades after the Centre closed BGML, citing lack of financial viability in operating the old mines. The Centre has floated a global tender, inviting bids from ‘transaction advisors’ or those who can advise the sale of tail dumps, and the matter has been referred to the High Court that has been hearing the liquidation case.
When the operations ceased in 2001, mining was being conducted at the depth of 3.2 km with about 1,400 km length of tunnel network. An estimated 50 million tonnes of ore yielded officially about 800 tonnes of gold. In its peak, the yield of gold in KGF was as high as 45 gram per tonne of ore in the 1880s, and when it was closed it had come down to less than 3 gram.
It is estimated that about 35 to 40 million tonnes of tail dumps is available and about 0.7 grams of gold could be extracted from a tonne of processed ore. It is estimated that about 20 tonnes of gold could be available from the tail dumps. The KGF has 13 mounds of cyanide dumps spread across about 300 acres, and about 60 mining shafts are now filled with water.
“The tender for transaction agent is to prepare for the tender. It is expected that international companies will participate in processing tail dumps since no Indian company has been involved in this process till now. We have no objection to the hovernment’s move because the company is not being sold. Let them identify the price and counter-offer to us as we have the first right of refusal as per the 2006 Cabinet decision, which has been upheld by the Supreme Court in 2013,” said K.M. Diwakaran, who was the Chief Engineer of Mines, BGML, and president of BGML All Employees Industrial Cooperative Society that is fighting the case against the company closure in the Karnataka High Court. “Technically, the company is not closed yet as matter is in the court and the government has not implemented the High Court order. About 3,100 employees have taken partial compensation on the promise that the company will be revived as per 2006 Cabinet decision.”
He said: “The government shut down the company when gold price was low and about ₹400 per gram besides the government had fixed administrative price for the company leading to loss. Now, price of gold is as high as ₹5,000 per gram and mining operation could be viable even if we recover one gram per tonne,” he said. Mr. Diwakaran said that while BGML was not allowed to sell gold in open market, Hutti gold mines in Raichur district was doing so. Mr. Diwakaran pointed out that 80 km of ore body in Kolar schist belt is yet to be exploited though it has been explored already that can yield up to 50 tonnes of gold annually.
Meanwhile, the Communist Party of India (CPI) on Wednesday demanded reopening of the Kolar gold mines in which senior CPI leaders, including CPI general secretary D. Raja and national secretary Binoy Viswam, took part. “The environment impact has to be first studied before the ore is sold. The arrears of ₹52 crore to former employees are yet to be settled and ownership of staff quarters as per direction of the Karnataka High Court has to be given to the employees,” said Harish Bala, president of All India Youth Federation, CPI’s youth wing.
Saga of Kolar Gold Fields
Mining in KGF started by Jhon Taylor & Sons in 1880. Operated till 1956.
Total area of KGF: About 12,600 acres
Bharath Gold Mines Ltd. formed in 1972
Last wage revision of employees at BGML in 1987
Referred to BIFR in 1992
Efforts to handover some closed operations to a private company in 1994
Three companies shortlisted from among 18 companies to take over KGF in 1997
Decision to close mining operations based on BIFR recommendation in 2000
Mining at KGF comes to an end in February 2001
Liquidation case reaches Karnataka High Court in 2000 - till now
Closure order set aside by the HC in 2001
About 3,100 of 3,500 employees did not take VRS in 2001
HC order upheld the company’s closure subject to payment of modified VRS as per 2001 to be offered to employees and fixed price for quarters to be handed over to employees in 2003
Tender to identify a new partner to restart the company along with the employees in 2008
With gold price going up, HC stays tender and directs for reopening in 2010
SC directs implementation of 2006 Cabinet order and hand over the company to employees in 2013
