New Gold Mining Policy on the Anvil

gold monetisation schemes
gold monetisation schemes

After the introduction of three gold monetisation schemes, the government is all set to bring out a gold mining policy in the country. Balvinder Kumar, Mines Secretary told Express that “we are ready with the proposal and will be taking it further with  different states. We are already in consultation with the state of Karnataka.

The government is said to follow the auction route for gold mining. At present, the mining land is with Bharat Gold Mines Limited (BGML) of which the lease period has been expired, Kumar said. He further added, we have lot of potential gold reserves in the country and opening up of the sector can help explore the untapped gold reserves. This will help in reducing our dependence on gold imports.

In India, due to various regulatory hurdles and lack of clear policy has seen no traction in gold mining. According to experts, if favourable policies are in place then over the next two decades, India could produce about 300 tonne per annum, similar to what China produces at present.

However, the gold mining policy in the country will allow foreign players to participate in bidding process. According to global mining expert, the gold exploration in India is cheaper than rest of the world. The global cost of mining, which is about $950-1,000 an ounce, for underground mines. But for instance, a particular mine at Ganajur in Karnataka, since this is an open pit mine, the cost of mining would be about $400-600 an ounce.

The recent launch of government’s gold monetisation and sovereign bond schemes that are intended to put tonnes of gold stacked away in households and temples into productive use and cut the country’s dependence on imports of the precious metal have a very less chance of success. As there has been some skepticism over whether the gold monetisation scheme will lure Indians to deposit their gold in banks as similar schemes launched in 1999 proved ineffective.

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