Raichur: Hutti Gold Mines Company Limited (HGML) near here is facing the threat of closure in the wake of the Government failing to withdraw permission given to Indophil Resource Exploration (India) Pvt. Ltd., which is near HGML.

Talking to presspersons here on Tuesday, Parasmal Sukhani, former Chairman of the HGML, said the reconnaissance permit issued to Indophil, a multi-national resource exploration company, by the Department of Mines and Geology to explore gold reserve in the Hutti-Maski greenstone belt meant that it would lead to the closure of HGML. The company is indulging in illegal mining of gold ore near HGML, he alleged. This will have an adverse effect on the prospects of HGML, he said.

He said the survival of HGML, the only premier gold producing company in the country, depends mainly on the gold reserves at Hutti and a few satellite mines. As it depends on these reserves, HGML's mining activities may come to an end by 2020. Though the modernisation process of HGML is on, the profitability of the company is based on the expenditure on each gram of gold extracted. In this context, it is essential to develop satellite mines in the Hutti-Maski greenstone belt near the main mine.

In this connection, HGML submitted applications to the Government in May 1994 seeking permission for prospective licence to go ahead with gold mining in the Hutti-Maski greenstone belt. But the Department of Mines and Geology failed to process these applications till 1999. However, in 1999, the Government brought an amendment to the Mining and Mineral (D&R) Act, 1957, facilitating private participation in gold exploration.

The then director of the Department of Mines and Geology granted a reconnaissance permission to explore gold in the Hutti-Maski greenbelt to Indophil though the latter had filed an application only in December 1999. Even at this stage, applications filed by the HGML were ignored, Mr. Sukhani said.

He said HGML had filed an objection with the Secretary of Commerce and Industry demanding that the permission given to Indophil be withdrawn. But Indophil obtained a court order in its favour and it is now involved in mining activities in the Hutti-Maski greenstone belt, he said.

Mr. Sukhani said the premature closure of HGML could not be avoided unless permission given to Indophil is withdrawn immediately. He said permission should be given to HGML to extend its mining activities at the new site. He has written a letter to the Government seeking justice for HGML, he said.

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