Kolar mines may return from depths of despair

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Jul 10 2013, 04:41am hrs
The defunct Kolar mines may start producing gold again with the Supreme Court on Tuesday throwing open the gates to mining of the yellow metal in the country. It has directed the Centre to float global tenders for revival of Kolar Gold Fields (KGF), which were declared sick and shut down in March 2001.

A bench headed by Chief Justice Altamas Kabir, while disposing of a batch of appeals filed by the Centre, Bharat Gold Mine (BGML) employees and others, set aside the Karnataka High Court's February 2010 order that directed the Union government to revive the second-deepest mine in the world itself rather than look for international partners.

While directing the Centre to proceed with the global tender in accordance with the Cabinet decision of 2006, the apex court asked the government to indicate that the lease was granted to BGML, which, in turn, had subleased 1,109 acre out of a total of 12,095 acre to Bharat Earth Movers. The sublease will end in April 2014.

Experts says that gold reserves could be extracted from the tailing dumps (cyanide dumps) of KGF, which still has reserves that could yield 10 tonne of gold per year for 15 years.

The division bench of the HC had asked the ministry of mines to take steps to revive the once-famous Bharat Gold Mines in KGF on its own, without any global bidding and also without entrusting the revival to the workers co-operative of the BGML.

After the government ordered closure of the PSU in 2001, its employees, officers and others had moved the company court seeking quashing of the closure order. The single judge in December 2009 had permitted the government to go for only global miners for

reviving the mines. However, it had ordered that only companies involved in gold mining should be considered.

BGML had challenged the single-judge bench order as it wanted the global tender to be opened to all mining companies and not merely gold mining firms.

Although the mines were formally closed in 2001, the closure dates back to 1992-93, when the formal decision to close down the mine was taken as the reserves were close to exhaustion and even BGML was making losses. In 1998, the company was referred to BIFR for closure. While its 3,500 employees wanted the government to hand over and run the mines, the latter was bent upon closing down operations.