The state-owned Hutti Gold Mines Company Ltd (HGML), India?s only primary gold mining company, is likely to float global tenders to develop a new vertical tunnel (shaft in mining industry terms) with the depth of around 3,200 feet, the deepest shaft in the Indian mining sector.
Technology to develop such a giant shaft is mainly available with Chinese mining firms, hence the global tenders, sources in the mining industry said. Shaft is a vertical tunnel constructed to gain access to underground mineral deposits.
Talking to FE, Rakesh Singh, managing director of HGML said the proposal for the new shaft has been cleared in the board meeting of the company and sent to the government for approval.
Singh said the tenders are expected to float in the next 45-60 days and the company has earmarked Rs 130 crore for the project. Once the work was awarded, he said the project is expected to complete in 18 months. He said the entire project would be funded through internal accruals, he added.
Currently, the company has been mining around 2,800-3,000 kg of gold per annum in Hutti-Muski belt in Karnataka through three shafts. The company has also decided to deepen the first and main ?Mallappa? shaft further to 2,900 ft from the current level of 2,600 feet. In addition to the main shaft, the company is also mining gold bearing ore through two other shafts??The Central shaft? with 2,600 feet depth and ?Village shaft? with 1,500 feet under the ground. After the closure of another state-owned gold mining firm Bharat Gold Mines in Karnataka, HGML is the only gold producer in the country. In fact, the company suffered heavy losses between 1993 and 2002 due to the high cost of production of gold compounded by dues and lack of working capital. The unstable prices of the yellow metal in the world market had pushed the company into the red. But now the company plays well on the booming gold market. From 2004-05 fiscal, when HGML witnessed its highest production of 3,500 kg of gold at the time when the gold prices started hitting upper circuit, the company has been recording higher profits.
The higher gold prices have also promoted the company to reopen a gold-bearing reef in Huttu region, which was shut down 90-year back during the British regime. This was the main gold bearing reef then and it was closed following what was then termed poor gold recovery.