At a time when gold prices are scorching, the state-owned Hutti Gold Mines Ltd (HGML)?India?s only primary gold mining company?and two private entities are not seeing eye to eye over bagging prospecting licence (PL) for gold exploration in Hutti region in Karnataka. With the controversy hampering the image of the mining sector in mineral-rich Karnataka, the new BJP government in the state plans to hold talks with government and private entities to evolve an amicable solution.
After the closure of another state-owned gold mining firm?Bharat Gold Mines?in Karnataka, HGML emerged as the only gold producer in the country. Currently, the company has developed underground mining in Hutti region for a depth of about 2,600 feet and producing around 2,800-3,000 kg gold every year.
The company, in 1994, had applied for 14 PLs for gold exploration in new sites in Hutti region, when two private entities?GeoMysore Services (GMS) and Indophil Resources Exploration Services?also applied for PLs for the same area after the Centre made amendments to the section 11 (1) of Mines and Minerals (Development and Regulation) Act 1957. The Act facilitated private players to enter the Indian mining sector.
Indophil is a 100% subsidiary of Deccan Gold Mines, the country?s first and only gold exploration company listed in the Bombay Stock Exchange. While applications were under scrutiny, the Centre had issued another order in February 2000, noting that all applications filed for PLs would be null and void. The companies were directed to apply for fresh reconnaissance license (RL) or preliminary contract to explore gold and later go for PL.
Immediately, GeoMysore and Indophil have applied and received RLs to explore gold in the Hutti region. After finding healthy gold reserves, both the companies applied for PLs. But till date, the government has not sanctioned any PL to them due to strong objections from HGML. Following this, Indophil moved the Karnataka High Court, urging the government that preference should be given to the company for PL as it already under taken exploration work under RL.
Now another private entity GeoMysore may also take legal action if the matter was dragged further, an official attached to GeoMysore told FE, requesting anonymity. He said HGML has failed to apply for RLs when the Centre made it mandatory in 2000. Now without RL, HGML should not be issued PL, he added.
But an official with HGML, requesting anonymity, said ?Technically, there was no need for HGML to carry out a reconnaissance survey in the region to get PLs. Several years ago, Geological Survey of India (GSI) and Mineral Exploration Corporation (MEC) had identified gold deposits in north Hutti. Hence, the HGML applied for PLs without conducting a reconnaissance survey,? the official added.