Centre to extract $2.1 bn worth of gold from leftover ores in KGF

New Delhi: The Union government is about to invite bids to extract gold from 50 million tonnes of processed ore in a cluster of colonial-era mines in Karnataka, Reuters reported citing a government source.

The Kolar gold fields (KGF) situated northeast of Bengaluru are among India's oldest gold mines. The mines were closed 20 years ago but have held gold deposits worth around $2.1 billion. India is planning to employ new technology that could extract gold from even leftovers of ore here.

In addition to gold, the government is planning to extract palladium from processed ore or dumps. The source, who wished not to be identified, said that the government is looking to monetize the gold reserves trapped in the processed ore.

According to him, the government might invite bids in the next four or six months.

Since only foreign companies have the technology and experience to extract the gold from processed ore, bidders from India could tie up with them or from a consortium for the business, the official said.

However, the federal mines ministry did not immediately reply to Reuters' email to comment on the said move.

India is the world's second-largest consumer of gold (China stand at top), and most of its gold needs are satisfied through imports. The country had raised the duty on gold exports to 12.5 per cent from 7.5, aiming to suppress demand, bring down the trade deficit and ease pressure on Indian Rupee.

The World Gold Council said that Indian demand for the yellow metal reached 14 per cent from last year to 191.7 tonnes in the quarter through September, Reuters reports.