India’s gold mine output has the potential to spiral from 1.6 tonnes in 2020 to 20 tonnes a year: WGC

India’s gold mine production stood at a mere 1.6 tonnes in 2020 but could rise to 20 tonnes per year in the long-term, World Gold Council said during the launch of a report titled ‘Gold Mining in India’. The report has highlighted that India has a rich heritage of gold mining, but industry’s growth has been hampered by legacy processes and under-investments. 

Despite India being one of the world’s largest consumers of gold, the mining market operates on a small scale and is not an easy one to enter. In 2020 gold mine production was just 1.6 tonnes. “India’s current resources, when compared to production and resource levels in other countries, could reasonably be expected to support annual output of approximately 20 tonnes per year in the longer-term,” the council said.

The report has listed regulatory challenges, taxation policies and infrastructure 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 change is needed for this to happen, legacy hurdles must be reduced considerably, and investments encouraged.”

He noted that there have been promising signs in recent years with changes in the Mines and Minerals (Development and Regulation) Act and introduction of the National Mineral Policy and National Minerals Exploration Policy. “If this trend continues, India’s mine production is expected to increase in the coming years. Furthermore, mining helps to bring infrastructure investment to a region, initiating and supporting associated service industries, many of which often persist long beyond the working life of the mine.” Somasundaram said.

According to data published by the Ministry of Mines, India’s current defined gold reserves total 70.1 tonnes. “88 per cent of India’s gold reserves are in the state of Karnataka; a further 12 per cent are situated in Andhra Pradesh and an insignificant amount (less than 0.1t) are found in Jharkhand,” the report said. Since its restart in 1947, through to 2020, Hutti Gold Mine, located in the Raichur district of Karnataka, has produced some 84 tonnes of gold and is currently the only significant gold producer in India.

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