PTI, Economic Times, 27 April , 2003 :

BANGALORE: Karnataka will soon have more gold and diamond mines with the Government keen to grant prospecting licences and mining leases on priority to the reconnaissance permit holders.
 
With the Government all set to encourage private participation, Mysore-based Geo Mysore Services will be the first private sector mining company to commercially produce gold in Karnataka, Basappa Reddy, Director, Mines and Geology..
 
“They will be filing their prospecting licence and mining lease application soon and within six months they should be getting the licence,” he said.
 
At the half-yearly review meeting of the reconnaissance permit holders held last month, it was found that the results obtained so far by the company have been “encouraging”. Geo Mysore Services has found workable gold deposits in North of Kolar Gold Fields (KGF) and Maski area in Raichur district.
 
The government already had issued 30 reconnaissance permits to eight companies in the state. However, only a few companies are carrying out reconnaissance operations in a time bound manner, he said.
 
The Italian major ACC Rio Tinto Exploration Limited which has been accorded five reconnaissance permits to explore diamond in the state has already commenced work in Bellary South, Bellary North and Raichur South covering an area of 4059 sq kms, he said.
 
As many as 456 stream sediment samples were collected from exploration in these areas. Analysis of these samples have indicated 13 drainage catchments having anomalous counts of probable kimberlitic source indicatro minerals. In one catchment two diamonds were discovered, Reddy said.
 
Exploration activities in Chitradurga and Tumkur Reconnaissance permits have also been completed. The company which has spent Rs 5.1 crore so far proposes to spend about Rs 2 crore this year, he said.
 
The company has put up its exploration office and sample preparation facility on the outskirts of Bangalore at the cost of Rs 4.8 crore. This facility will be utilised for processing mineral samples collected by the organisation in India and also in other countries, he said.
 
De Beers, the South African diamond major which has been granted five reconnaissance permits covering an area of 7787.7 sq kms, has completed aerial survey of the entire area. The company has identified 511 anomalies and collected 1930 stream sediment samples, out of which results for 834 samples have been received, Reddy said.
 
They have also carried out a geophysical survey over an area of 120 line kms. Analysis of the data indicates that there are some “probable diamond, ferous Kimberlite pipes”, Reddy said. The company which has so far spent Rs 2.91 crore on exploration work, plans to undertake an electromagnetic survey this year, he said.
 
Major gold producing unit in the state, Hutti Gold Mines Limited (H G M L) has been granted two reconnaissance permits and is carrying out exploration work covering an area of 3381.73 sq kms, Reddy said.
 
The company was floating tenders seeking joint venture partners and as soon as the tenders are completed, exploration work will be intensified, he said.
 
The other reconnaissance permit holders are Ramghad Minerals and Mining Private Limited, Indophil Resources Exploration Services (India) Limited and National Minerals Development Corporation (NMDC).
 
With increased number of gold and diamond mines, the state’s potential to reach production target of 100 tonnes in gold does not seem far away, he said.
 
At present the gold production in the country is about 3 to 3.5 tonnes annually out of which Karnataka’s share is almost 3 tonnes, he added.