Rio Tinto, De Beers to hunt for gold, diamonds in Karnataka

Rio Tinto of Australia, De Beers of South Africa and 16 other mining companies have applied to the Karnataka government for licences to look for gold and diamond in the northern part of the state.

These companies have already carried out reconnaissance surveys and have identified areas such as Raichur, Dharwad, Hutti, Bagalkot, Bellary, Chitradurg and Gulbarga, a senior state government official said.

VP Baligar, principal secretary, commerce and industries department, Karnataka said the state government has forwarded its recommendation to the Centre for approval of exploration licenses to the 18 miners.

A representative of the British Columbia Trade and Investment in India, who did not want to be named, said two British Columbian firms were also looking to buy mines for base and precious metals in Karnataka. They are looking at copper, nickel and gold mines in the state.

The state’s Kolar Gold Fields near Bangalore was one of the major gold mines in India but was shut down in 2003 due to depleting deposits, which had made it commercially unviable. The field had produced 900 tonnes of gold.

The miners would apply for mining permits once they find gold deposits in the area, Baligar said. He noted, however, that the companies may encounter hurdles in acquiring mining licenses in the region as some parts were covered with forest. “A large chunk of the land in those areas is either private or covered with forest.

We will have to get the clearances from the ministry of environment (to begin mining). It is not serious problem but may delay the whole procedure to begin mining,” he said.

The official could not specify the investment that would come into the state but said once the miners strike gold or diamond, the state government would start earning royalty, which was ad valorem.