India, the worlds largest gold consumer, can step up its meagre output if proposed joint ventures with foreign firms pan out, analysts said.
In studies presented at a mining conference in the central Indian city of Nagpur on Saturday and Sunday, calls were made to the government to grant licences more quickly and introduce measures to attract investment in gold exploration.
Governments (federal and state) may consider a few concessions in the form of assistance in land acquisition and supply of adequate power, said M.H.R. Rao, technical director of the state-owned Bharat Gold Mines Ltd (BGML). A tax holiday and concessions on duty for import of technology and equipment would help, Rao said.
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He said Indian gold mines were untouched by new trends in mining technology. .Indias gold production is only about two tonnes a year, most of it from the Kolar Gold Fields (KGF). But annual consumption is about 500 tonnes, including 300 tonnes of imported and 200 tonnes of recycled meta..India liberalised its mineral and mining policy in March 1993, opening the mining sector to private and foreign investment, but analysts said it needed fine-tuning.
Many agencies, both foreign and Indian are keenly awaiting the official policies towards prospecting for gold and grant of licences, Rao said. He said nearly 43 potential areas had gold-bearing deposits besides the existing mines at Kolar and Hutti in southern India.
BGML, which runs the existing gold mines, was the first to float global tenders seeking joint venture partners, following changes in Indias mining policy.
Separate bids were floated for recovery of gold from tailings the leftover low grade ore of existing mines.
The response to the global tenders has been good, said R Gupta, BGML managing director, in a separate study.
Gupta said seven bids for exploration and eight for the tailings project had been received. Most of the bidders were from Australia, with one each from Canada and France. However two Australian companies, which were shortlisted for final negotiations, withdrew, saying gold resources as estimated by BGML fell short of their expectations.
In spite of these setbacks, a number of small Australian and Canadian companies are still showing interest to have a joint venture with BGML, Gupta said.
Ore reserves held by BGML have been estimated at 3.83 million tonnes from five mines spread over the two southern states of Karnataka and Andhra Pradesh. The tailing resources add up to a further 3.18 million tonnes.
BGML had suggested that joint ventures should have a foreign equity of not more than 50 percent, he added.