Australian firm caught in lure of Indian gold

Sangita Shah, Business Standard, January 08, 2003 :

India could be headed for a gold mining boom, with Australian Indian Resources (AIR) Pty Ltd seeing the possibility of mining about 300-400 tonnes of gold. At present, India mines about two tonnes of gold a year.
 
The company is currently focusing on the North Kolar Tenement and the South Hutti belt in the states of Karnataka, Orissa and Andhra Pradesh.
 
While the Geological Survey of India had already identified gold mining zones that have the potential of producing hundreds of tonnes of gold, the sheer expense of mining for gold whose recovery rates are low proved prohibitive.
 
However, AIR has mined gold deposits in west Australia under similar geological conditions and has the technology to extract ore at low recovery rates.
 
It is taking a plunge into mining the proven gold deposits in nine Indian states. Charles Devenish, chairman of AIR, said: Mining 300-400 tonnes of gold in India is possible and the reason is that India has the potential to develop small mines which in Australia would be uneconomical. At the same time India can also develop large mines “I strongly believe that India with its virgin mineral resources and a public with an appetite for gold can become the dominant mining country of the world in the next 30 years,” Devenish added.
 
AIR has already taken over a company, Wimper Trading, listed on the Bombay Stock Exchange (BSE), through its 100 per cent Mauritian subsidiary Rama Mines (Mauritius) Ltd, for gold mining. Its open offer for Wimper Trade closed on Monday.
 
And the company would soon re-list the shares under the company’s new name, Deccan Gold Mines Ltd, Sandeep Lakhwara, managing director of AIR told Business Standard. The company will call an extraordinary general meeting of shareholders shortly to approve the change in name.
 
India at present mines two tonnes of gold a year against about 280 tonnes in west Australia. Last year, India imported about 825 tonnes of gold, both legally and otherwise.
 
After being a successful miner in Australia, Zimbabwe, the US and South Africa, Devenish has been with his company for the last seven years in India and only recently achieved a breakthrough in the gold mining business.
 
He said India had a heritage of 4,000 years of mining, against 150 years in Australia. India, however, has failed to develop a modern mining industry when west Australia, with identical geology, has developed a successful mining industry in the last 35 years.
 
“Five hundred years ago India was able to drill a hole through a diamond. The West only learnt how to facet a diamond. Two thousand years ago, India was smelting zinc. The West only started that about 130 years ago. With such a strong legacy, India can definitely be at the top of the world mining industry,” he said