India to auction 80 gold mines
Despite all efforts to curb its citizens' appetite for gold including punitive import taxes and regulations and monetization schemes, Indians still prefer to get their hands on the real thing.
India's gold bullion imports more than doubled to $4.95 billion or 140 tonnes in August making the country's imports for the month roughly the equivalent of the last 6 months' net redemptions of physically-backed gold exchange traded funds by investors in developed countries.
The country's purchases is set to top 1,000 tonnes again this year and gold is India's top import after crude oil. Gold makes up a third of the country's chronic current account deficit. All of which makes it surprising that the local gold mining industry is so under-developed.
The Guardian reports that this may be about to change and quotes Balvinder Kumar, of the mines ministry as saying studies by state governments have uncovered "some very deep and old mines" with gold worth more $3.9 billion existing in the Kolar region in the southern state of Karnataka alone. The ministry will put about 80 mines to auction within two or three months.":
Kolar was first mined by British companies at the end of the 19th century, said Bridget White-Kumar, a local author and historian. In 1850 a retired Irish soldier who had fought in the army of the East India Company during its campaigns to seize the princedom of Mysore investigated reports of mines in the region. Over the decades that followed, the project and a thriving community grew.
But most of the gold was sent back to London, White-Kumar said. Kolar’s mine was nationalised in 1956 and finally shut down in 2001. White-Kumar said: “The glorious period was until the mid-1970s. There were a lot of unions that couldn’t agree with each other and costs were mounting. The gold was sold under the market rate. As a community, we haven’t come to turns with it even now. This news is what we have been waiting for.”
Image of Golden Temple in Amritsar, Punjab by Dainis Matisons