The Hindu : Karnataka News : HGML plans to trade in bullion

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

Karnataka

Karnataka

HGML plans to trade in bullion

By Our Special Correspondent

BANGALORE, SEPT. 29. Hutti Gold Mines Company Ltd. (HGML), the country's main gold production company, has sought permission from the State Government to trade in bullion.

The company, which was incurring losses till 2002, had submitted proposals to the Government for the purpose, the HGML Chairman, Parasmal Sukhani, told presspersons here today. "The approval is awaited. This is aimed at increasing the volume of business and to gain experience in gold trading." HGML hoped to pay 50 per cent dividend to its shareholders in the current financial year as against 25 per cent declared in 2003-04, he said.

He said the company posted a net profit of Rs. 48.56 crores in 2003-04 as against Rs. 22.88 crores in 2002-03. The company had registered an operating profit of Rs. 63.59 crores in 2003-04 as against Rs. 41.30 crores in 2002-03, a 54 per cent increase. The cash profit increased from Rs. 34.40 crores in 2002-03 to Rs. 59 crores last year.

HGML had produced 3,108 kg of fine gold in the last financial year compared with 2,709 kg in 2002-03, an increase of 15 per cent. The company earned a total income of Rs. 173.40 crores in 2003-04 as against Rs. 143.33 crores in the previous year, an increase of 21 per cent. The value of production amounted to Rs. 172.06 crores as against Rs. 141.94 crores in 2002-03.

Target

For the current year, a target to produce 3,300 kg of gold had been set against 3,108 kg achieved in 2003-04. The projected profit before taxation for the current year was estimated at Rs. 50 crores. For the period from April to August this year, HGML registered a profit (before taxation) of Rs. 29 crores. From the inception of the company till March 2004, the total quantum of ore mined was 8.79 million tonnes and the gold produced 53.33 tonnes, Mr. Sukhani said. At present, there was no mining in Chitradurga as the grade was low and uneconomical. The company had received reconnaissance permits for mining in Chikkanayakanahalli, Gadag and Dharwad South blocks. The reconnaissance survey was in progress in the three blocks, he said.

Modernisation

On modernisation of the mill, he said the company proposed to install an SAG mill and a ball mill.

Prices may not fall

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

The prices would remain at Rs. 6,000 per 10 gm of gold in the next five to 10 years.

It would not come down as many multinational companies had started using gold in allopathic drugs, electronic goods and luxury items, Mr. Sukhani and B.A. Lalgondar, Executive Director, said.

The annual requirement of gold in the country, according to an estimate prepared by the World Gold Council, was 700 tonnes per annum. .

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