Return of the Golden Bird?

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Ancient India was famous around the world as the land of gold with the kingdoms of India having vast stores of the precious metal having acquired it mostly via trade. That said India had its gold Mines as well with the mines at Kolar & Hatti in Karnataka verified as being in operation from the Indus valley & Ashokan era. These gold mines have pretty much turned defunct now after millennia of mining and simply do not fulfil even the domestic needs OF India today. That said the mining of gold in India look to return to the center stage now with the discovery of 3350 tonnes of Gold reserves in the Sonbhadra district of Uttar Pradesh.

Once properly exploited this mine will turn India into the World’s biggest gold miner leapfrogging China which has reserves of 2000 tonnes. In fact India today does not rank among the top fifteen Gold producing nations, Sonbhadra has the potential to take us to the very top. Gold is particularly important for India as we are the biggest importer of this precious metal & it has a very detrimental effect on our trade deficit. India imported gold worth 32.8$Bn in 2018-19 which was nearly a third of our net trade deficit of 103.46$Bn for the same year, the figure of 2019-20 is some 831 tonnes of gold imported at a cost of $31.5Bn. With the Sonbhadra mine becoming operational much of this outflow towards the import of gold can be stemmed. It is also worth noting that India re exports much of the gold it imports as jewelry, with this industry bringing in around $30.5Bn in exports in the 2018-19 period as well.

The Sonbhadra mine can logically be expected to help boost Indian Jewelry Exports while helping us curtail import of Gold so as to vastly increase the net amount of forex this industry brings to India. The Mine shall also provide an additional impetus towards development of the Electronics, computers & aerospace industry in India. This has obvious benefits for the fast growing mobile phone manufacturing & electronics industry centered on the City of Noida in Western Uttar Pradesh as well as for the upcoming defence industrial corridor in the state. The mine can be expected to give a significant boost to the economic growth of Uttar Pradesh & the Sonbhadra region by raking in revenues in billions of dollars for the state.

That said this is just one of a multitude of areas where the government has poured resources into in order to locate & exploit new resources of gold. The Hutti Mines near Bengaluru are all set to get a revamp as the government plans to expand the facilities there & increase gold production. It is worth noting that only 13% of the land area of India has been explored for Gold reserves. There exist tantalizing possibilities for massive yet untapped gold reserves like the Subarnarekha reserve (estimated at 7 million tonnes of ore). Gold mining in India suffered for a long time as rigid government policies coupled with the difficulty in prospecting for & mining this precious metal made mining Gold an unviable process. Recent changes in policy to allow private players access to these deposits for commercial mining may help India do away with Gold imports within the coming decade if handled correctly. However that’s something for the future.

Author – Sowmik Pyne

Twitter: @Aryanwarlord