The Hindu : Karnataka News : `Gold jewellery prices may not fall'

Online edition of India's National Newspaper
Thursday, Sep 30, 2004

Karnataka

Karnataka

`Gold jewellery prices may not fall'

By Our Special Correspondent

BANGALORE, SEPT. 29. With the demand for gold increasing every day, the prices of gold jewellery are unlikely to fall in the next five to 10 years in the country.

The prices will remain at Rs. 6,000 per 10 gm of gold in the next five to 10 years. It will not come down as many multinational companies have started using gold in allopathic drugs, electronic goods and luxury items, Parasmal Sukhani, Chairman, Hutti Gold Mines Company Limited (HGML), and B.A. Lalgondar, Executive Director, told The Hindu on Wednesday.

Requirement

The annual requirement of gold in the country, according to an estimate prepared by the World Gold Council, was 700 tonnes per annum. The HGML, the only company engaged in extraction of gold in the country, produced three tonnes of gold and it was sold in the State. The gold requirement of the State was estimated at 15 tonnes per annum.

Expansion

To meet the increased demand for gold, HGML had embarked on a Rs. 25-crore expansion plan, which included reclamation of the old Bellara Mines in Sira taluk of Tumkur district. It had decided to reopen an old mine at Ajjanahalli in Tumkur district, which was closed by the British. Mineral Exploration Corporation Limited (MECL) had been entrusted with a contract to carry out a survey and other works at the Bellara Mines,which would cost Rs. 54 lakhs.

The mining at Ajjanahalli had been stopped on account of high transportation and other costs, Mr. Sukhani said. The ore tailings at the Bellara Mines alone contained 2.46 gm of gold per tonne of ore. In the first instance, tailings would be refined to extract gold, and work would start on deepening the mine where the ore had a gold content of 6.8 gm per tonne, they said.

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