The World Gold Council (WGC) has released a report entitled ‘Gold Mining in India’ as part of a series of in-depth analyzes of the Indian gold market.
Gold mining production in India was just 1.6 tons in 2020, but could increase to 20 tons per year in the long run, the World Gold Council said Thursday. The World Gold Council (WGC) has released a report entitled ‘Gold Mining in India’ as part of a series of in-depth analyzes of the Indian gold market. The report highlighted that India has a rich gold mining history, but the industry’s growth has been hampered by outdated processes and underinvestment, WGC said in a statement.
“Despite India being one of the world’s largest consumers of gold, the mining market operates on a small scale and is not easy to enter. In 2020, gold mine production was only 1.6 tons. “India’s current resources, compared to production and resource levels in other countries, could reasonably be expected to support annual production of about 20 tons per year in the longer term,” the council said. †
The report identifies regulatory, tax policy and infrastructure challenges as major problem areas. Somasundaram PR, Regional CEO, India, World Gold Council, said: “Given that India is one of the world’s largest gold consuming countries, it makes sense for it to develop mining capacity. But that requires change, barriers from the past must be significantly reduced and investment encouraged.” He noted that in recent years there have been promising signs with changes to the Mines and Minerals (Development and Regulation) Act and the introduction of the National Minerals Policy and the National Minerals Exploration Policy.
“If this trend continues, mine production in India is expected to increase in the coming years. That said, we don’t see this becoming a reality until the longer term, as potential investors will wait in the near future to see how successfully the new policies will be implemented and how effective they will be,” Somasundaram said. has the potential to provide India with significant sustainable socio-economic development not only through investing in gold exploration and mining but also through the legacy of training a skilled workforce.
“In addition, mining helps bring infrastructure investment to a region, by initiating and supporting associated service industries, many of which often persist long after the mine’s lifespan.” It is only when investors can see real evidence of India managing its gold mining to make assets more efficient than we can expect to see inward investment. And at that point, the country’s gold mining sector will have a much brighter future,” Somasundaram said.
Across the three problem areas, the WGC report said the process to get approval for a mining permit is usually lengthy, involving multiple agencies and requiring 10-15 approvals for a single permit. lengthy and costly delays in project development. All this discourages investment, especially from multinational companies that can invest their resources in countries with a similar geological perspective, but with less burden from the past,” the statement said.
Import taxes on mining equipment and other direct and indirect taxes remain high compared to other countries.” In the absence of domestically produced alternatives, project developers have little choice but to import specialist mining equipment, much of which comes from a small number of manufacturers. High import taxes increase the cost of capital and discourage development,” the report said.
The report pointed out that many of the major gold mining areas are in remote locations in states with poorly developed infrastructure. In particular, unsuitable road and rail connections can make moving materials to and from locations difficult and expensive. As a result, there has been limited investment in gold exploration over the past 15 years.
However, WGC said the Indian government has proposed and implemented several policy changes in recent years to help develop India’s gold mining sector by tackling the most problematic areas. ) Act of 1957 (MMDR), which allowed private companies to bid for mining leases through a competitive auction process and extended the period for large mining leases from 30 to 50 years.
In June 2016, the government approved the National Minerals Exploration Policy (NMEP) in an effort to boost mine exploration, while in March 2019 the government announced the implementation of the new National Minerals Policy (NMP 2019) in an effort to reduce bottlenecks and encourage development in the sector. This policy applies to non-coal and non-fuel minerals and aims to increase the value of minerals produced in India by 200 percent over a seven-year period.
According to data published by the Ministry of Mines, India’s currently defined gold reserves amount to 70.1 tons. “88 percent of India’s gold reserves are in the state of Karnataka; another 12 percent are in Andhra Pradesh and an insignificant amount (less than 0.1 metric tons) is found in Jharkhand,” the report said. Since its restart in 1947 to 2020, the Hutti Gold Mine, located in the Raichur district of Karnataka, has produced approximately 84 tons of gold and is currently the only major gold producer in India.
This post India’s gold mine production 1.6 tons in 2020; can reach up to 20 tons/year: WGC
was original published at “https://www.financialexpress.com/market/commodities/indias-gold-mine-output-1-6-tonnes-in-2020-may-rise-to-20-tonnesyear-wgc/2464212/”