India imports more gold per year than any other country in the world. When the Indian economy was booming, the average import was around 1000 tons per year. Moreover, the import of gold never slipped below 500 tones even when the economy slowed and the value of rupee against the US dollar fell considerably.
The Indian people have always coveted yellow metal. Their love stemming from the belief that gold brings good luck. The precious metal is the ultimate gift during festivals, weddings, and other celebratory occasions.
Unfortunately, India’s gold production can be termed as ‘minuscule’ at best. India is positioned way down in the list of gold producers; ranked below countries that are several times smaller in size.
Let’s take a look at the history of gold mining in India, the current state of gold production, and its plans for the future.
History of Gold Mining in India
Gold mining in India dates back to the time of the Indus Valley Civilization. Even thousands of years ago the gold extracted from the goldfields was not enough to quench the demand. Luckily, the kingdoms that ruled the sub-continent had strong trade relations with the Roman Empire. India used to trade spices, pearls, and artistic items for gold from the Roman lands.
Almost all major empires and rulers – The Gupta Empire, The Chola Dynasty, The Vijayanagara Empire, and Tipu Sultan – that controlled the region mined gold in Kolar. These were all small scale mining using traditional methods.
It was only after the 1850s when India came under the direct rule of the British Empire that large-scale production with modern methods was adopted in the Kolar Gold Field.
After independence, the control of the mines shifted to the Mysore Government. In 1962, the central (federal) government brought the mine under the jurisdiction of the Ministry of Finance.
In the 1970s, the Bharat Gold Mines – a public sector company under the central government – took over the operations of the mines. In 2001, after three decades, the production stopped due to low yield and increasing cost of extraction.
The Kolar Gold Field, in its modern avatar, was in operations for more than 120 years. During this period, the mine yielded 26 million troy ounces or 800 tons of gold.
Active Gold Mines in India
The minuscule contribution of India to the global production is to be blamed on lack of large-scale gold discoveries for several decades. At present, there are very few active gold mines in the country. The three mines – Hutti, Uti, and Hirabuddini – are the most productive ones. All active gold mines are located in Karnataka, India.
The three state-owned mines are jointly referred to as the Hutti Gold Mines. This is the only entity in the country that both extracts and processes the ore. The company mines gold ore from Hutti (main mining area), the Chitradurga Gold Unit, and two smaller mines (Uti and Hirabuddini).
In the mid-1980s, the copper mining company operating the Chitradurga Mines merged with Hutti. Now, along with the base metals, gold is produced as a byproduct in the Chitradurga Mines.
The Current State of Gold Production in India
The Hutti mine too has a long history. It became operational in 1902 and is situated in the same area as that of the Kolar Gold Fiend. The gold yield has steadily declined in Hutti since the 1970s. In 2015, the company reported gold production of 60,000 ounces, including the share extracted as a byproduct during the production of base metals.
The Hutti Mine has struggled to produce gold in large quantities. At present, the company manages just 2.65 grams of the yellow metal from a ton of ore.
The fluctuation of gold prices has had an impact on operations in the past. Seeing the steady increase in the gold prices in recent years, the company is making plans to step up gold production.
Future of Gold Mining in India
The company worked out a plan and took concrete steps to reduce operational breakdowns and improve efficiency. The results are encouraging. Gold production increased by 28% during the first 4 months of 2019.
The year-over-year increase in gold production, from 1310 in 2015-16 to 1663 in 2018-19, has further encouraged the company to make big plans for the future.
At Raichur, the company is mining ore at a depth of 850 meters and extracting 0.6 million metric tons of ore (approximately). The company plans to increase the depth of the underground mines to 1000 meters. After the expansion, the company aims to increase gold production to 3 metric tons per year.
The planned expansion also includes a new ball mill to boost the processing capacity of the company. Furthermore, new residential facilities, a hospital, and other amenities for the workers are in the process of development.
The company believes there is more gold in the adjoining areas. It has applied for permission from the local authorities to undertake mining in the surrounding areas.