NRI billionaire Anil Agarwal-led Vedanta has bagged the prospective-cum-mining licence to mine gold from Baghmara lease in Chhattisgarh, outbidding others — Krishna Global Minerals, Rungta Mines, Sainik Mining and Allied Services — in the nation’s first-ever auction of a reserve containing the yellow metal.
The diversified natural resources conglomerate has agreed to pay Rs 9,316 to the state for every troy ounce, or 31.1 gm, gold production from the lease, spread over 608 hectares, which has an estimated 2,700 kg reserve. Baghmara is the oldest explored gold deposit in central India and has long been seen as having commercial potential.
The Chhattisgarh government had kept the reserve price for bidding for Baghmara at 1% of the Indian Bureau of Mines (IBM) price of Rs 74,712 per troy ounce. The highest initial price offer received was 3% of IBM price, which was the floor price for e-auction.
“During forward e-auction, the highest bid was 12.55% of IBM price quoted by Vedanta. Auction of this mine is expected to yield Rs 81.40 crore by way of bid revenue, in addition to royalty of Rs 24.70 crore to the state,” Chhattisgarh mines secretary Subodh Kumar Singh told FE.
Baghmara is located in the eastern part of Balodabazar-Bhatapara district of the state and is about 130 km north-east of Raipur. The gold deposit was previously explored between 1981 and 1990. However, the level of exploration undertaken so far falls under the G3 category. Vedanta will have to carry out detailed exploration to take the deposit to a G2 category to commence mining.
Chhattisgarh had notified auction of four limestone blocks and Baghmara gold mine on December 8. “Baghmara saw aggressive bidding, which went on for nearly 13 hours and over 160 bids were submitted,” Singh said.