It is one of those delicious ironies of life that India, the world’s largest consumer of gold, has very little to show when it comes to actually mining the yellow metal.
That’s poor form because India sits on very large resources of gold, revealed by several geological studies in the past. One such study pegged India’s primary gold resources at about 491 metric tons. Despite its 6,000-year mining history, the country mines just around a pitiful 25 mt of gold annually.
India is one of the biggest importers of gold, despite a punitive 10% import tax. In the financial year ended March 31, gold imports had touched 900 mt, up 36% from a year ago.
Perhaps keeping all this in mind, and the fact that gold mining could mean earning some big bucks, Western Australia recently expressed interest in developing gold mines in India, as part of the bilateral cooperation in minerals and energy sectors between the two nations.
On a recent visit to India, Premier of Western Australia Colin Barnett said his province had a special interest in developing gold mines in India based on the fact that Western Australia has expertise in this sector since it produces 150 mt of gold annually.
The Indo-Australian Joint Working Group on Energy and Minerals was set up in 2000 to improve bilateral cooperation between the nations, precisely in this type of sector.
Domestic Mining Floundering
India seems to want to take up the offer. The current government has been actively thinking of enhancing gold extraction capacity, especially since some analysts have forecast that if it’s done the right way, India would be able to mine as much as 300 mt per year, which is almost equivalent to what China produces. In fact, the Indian Government was also actively considering a proposal to allow a private company to commercially extract gold from Ganajur gold mines in the Karnataka province, which has one of the largest known gold deposits in the country.
Australia’s gold mining expertise is well known around the world. In the last two decades, Australian companies have discovered over 8,500 mt of gold. Along with its geological, mining, and legal infrastructure in place, gold analysts feel the deal with Australia would prove beneficial to India.
India’s largest gold mine was at Kolar in southern India but that was closed nearly 13 years ago. Previous governments tried their best to revive it but to no avail. Can Australia succeed where others have failed?
The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.