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India offers good scope for gold mining-expert

NEW DELHI: India, the world's largest consumer of gold but with little production of its own, offers good scope for exploration by private Indian and foreign companies, a geologist at a metals conference said on Monday.

"India has a deficiency of 100 percent in gold," said Babu George, mining geologist with the Indian Bureau of Mines, in a paper presented at the two-day conference on India organised by the London-based Metal Bulletin.

India annually produces about two tonnes of gold from its Kolar Gold Fields based in southern India. The country imports most of its gold, and some enters through smuggling.

Bullion analysts in Bombay have estimated India's imports in calendar 1996 at 400 tonnes, the same as in the previous year.

George said gold exploration so far has been conventional. Hence not enough data was available about the existence of deep-seated or concealed ore bodies, he said.

"Thus, one of the areas where considerable scope for investment exists is the deep exploration of these minerals," George said.

In 1993 India announced a new mineral policy in line with its economic liberalisation programme, which drastically reduced the dominant and exclusive role that the state sector had played in the exploration of minerals in the past.

Exploration for most strategic minerals, including gold and diamonds, has been thrown open to private investment.

Some foreign companies, including South Africa's De Beers Consolidated Mines Ltd DBRS.J, have since shown interest in mineral exploration in India.

But their enthusiasm is dampened by several factors.

"Known resources of gold are meagre to support a large-scale mining industry," George said.

He said mining did not also enjoy many of the benefits like bank loans and risk capital given to other industries.

Gold exploration in India is carried out mainly by the state-run Geological Survey of India and Minerals Exploration Corporation Ltd.

George said as exploration is carried out mainly through conventional methods and with inputs from geo-chemistry and geo-physical and remote sensing few deposits had been explored beyond a depth of 200 meters.

He said several new gold deposits had been identified in the Kolar belt in the southern state of Karnataka.

"There are 44 gold deposits which may require further prospecting at depth," George said.

"Considering the mineralisation depth at Kolar, it is geologically most likely that some of the deposits at least will have depth extensions beyond what is known now," he said.

Explorations have been confined mainly to certain areas and known deposits, George said. Exploration of virgin terrain with the latest technology could be feasible, he added.

George said large areas of green stone schist belts comparable to those in Australia and South Africa held promise.

India also possesses basic geological and exploration data, an institutional framework and highly qualified scientists, technicians and skilled workers, he said.

"Then there's the well established market for absorbing any quantity of gold," George added._Reuter