What are the rules and regulations of gold mining?
A film was released in the year 2018. The name was KGF. Although the story of this picture was fictional, its story was inspired by the Alsi Kolar Gold Fields. This field, famous for gold mining, was closed decades ago. The film depicts a laborer who later becomes Rocky Bhai. Becomes a hero and kills the enemies…its second part is also coming in 2022. The film was successful in cinema houses but after this a new discussion started regarding gold mining. Which has become more intense today. The main reason for this is that the first private gold mine has opened in India. Yes, this has happened in Andhra Pradesh. The new era of private gold mining in India has started from Jonnagiri village in Kurnool district of Andhra Pradesh, which is now known as Swarnagiri. Developed at a cost of about Rs 400 crore, this project is considered to be the country’s first large-scale private gold mine. Initial surveys have confirmed gold reserves of more than 13 tonnes, while after further exploration this figure is expected to reach 42 tonnes. In such a situation, the question is arising that how much gold can private companies extract, what are the rules for this and can the path of private gold mining be opened in other parts of the country also. What has been the history of gold mining in India? Let us talk about all these aspects in detail.
However, no private company is allowed to extract unlimited quantity of gold as per its wish. The quantity of mining depends entirely on the reserves that have been certified and approved by government agencies. After this, a mining plan is prepared, in which it is decided how much ore and how much gold can be extracted from it every year. Jonnagiri project is an example of this. Potential reserves here could reach 42 tonnes, but production in the first year is estimated to be only about 400 kg. In subsequent years it can increase to 900 kg to one ton annually. That means companies can do mining only within the approved production plan.
What are the rules for private gold mining?
In India, all major minerals including gold are mined under the Mines and Minerals (Development and Regulation) Act, 1957 and its related rules. Private companies have to go through several stages before starting mining.
- The state government auctions the mineral block and the successful bidder gets the rights.
- The company first has to conduct detailed exploration and scientific assessment of the reserves.
- After getting the mining lease, mining can be done only according to the approved reserves and prescribed production plan.
- The company has to deposit fees like royalty, auction premium, District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET).
- Approvals related to environment, forest and pollution control are mandatory.
- Production, safety and environmental standards are monitored by state and central government agencies.
That means private companies only get mining rights, ownership of mineral resources remains with the state.
Why did India lag behind in gold mining?
Today India is the second largest gold consumer country in the world, but lags far behind in terms of production. Interestingly, in the 1970s and 1980s, India’s annual production was about 5 tonnes, which at that time was considered equal to countries like China, Australia and South Africa. But now India has to import about 99 percent of its gold requirement. There are two main reasons why India lagged behind in gold mining. First, very little attention was paid to gold exploration and related research activities in the country. Second, the approvals and regulatory processes related to mining took a long time. For decades, government policy focused on minerals such as coal, iron ore, copper and zinc, which were considered more important for industrial development. Despite the opening of doors to the private sector in the 1990s, permitting and approval processes kept the pace of investment slow.
History of Gold Mining in India
According to the World Gold Council, the history of gold mining in India is thousands of years old. It is believed that gold has been extracted in the country on a limited scale since the first millennium BC. However, the identity of modern gold mining remained mainly associated with the Kolar Gold Fields of Karnataka. Kolar Gold Fields was counted among the most famous gold mines in the world. This area is located in the Dharwad Craton and Kolar Greenstone Belt of South India, whose geological structure is considered to be similar to many of the world’s largest gold mines. The mine, which opened in the 1880s, produced more than 800 tons of gold during nearly 120 years of operation. The average grade of ore extracted here in the first two decades was 45 grams per tonne, while the average grade throughout its life was around 15 grams per tonne, which is considered very high by global standards.
Source- Kolar Gold, WGC
In Kolar region, gold was mainly extracted from Champion, Mysore and Nandidurg mines. With time the quality of ore started declining and the cost of production increased. Kolar Gold Fields finally had to be closed in the year 2001. By that time the depth of mining had reached approximately 3,200 meters, making it one of the deepest gold mines in the world. The mine network extended 7.3 kilometers in length and consisted of approximately 100 shafts and more than 1,400 kilometers of underground tunnels. After the closure of Kolar, India’s domestic gold production declined rapidly and the country became more dependent on imports.
After Andhra Pradesh, private gold mines can open in these states
- There is a possibility in Odisha also- After Andhra Pradesh, Odisha is being considered as the next major gold producing state of India. According to a report by the organizer, indications of gold reserves have been found during geological surveys in Deogarh, Keonjhar and Mayurbhanj districts of the state. According to initial estimates, there is a possibility of about 1,685 kg of gold ore in these areas. After detailed drilling and further investigation this reserve may prove to be much larger than this. The state government is considering auctioning gold blocks in future. If this process goes ahead, Odisha can play an important role in the field of iron ore as well as gold production.
- Expectations increased in Koppal and Raichur in Karnataka- Indications of presence of gold have also been found in Koppal and Raichur areas of Karnataka. Initial studies have revealed gold grading of 12 to 14 grams per tonne at some places, which is considered to be of better quality as per global standards. However, a part of these potential mining areas fall in the forest area, due to which it can be a big challenge to get approval from the Ministry of Environment and Forests. In such a situation, it may take time to start commercial mining here.
- Eyes fixed on Mahakaushal Belt of Madhya Pradesh- Since August 2025, Mahakaushal belt of Jabalpur district of Madhya Pradesh is also in discussion regarding the possibilities of gold. Initial surveys have indicated the quantity of gold found here ranging from 2 to 5 grams per ton. If these indications are confirmed in further surveys, this area could create new opportunities for the development of gold and copper based industries. At present this area is in the initial stage of exploration and evaluation.
Will India’s import dependence on gold reduce?
India imports about 700 to 900 tonnes of gold every year, while domestic production is currently only around a few tonnes. In such a situation, projects like Jonnagiri certainly hold symbolic and strategic importance, but these alone will not bring about a major change in import dependence. Yet if new reserves are developed in states like Andhra Pradesh, Odisha, Karnataka and Madhya Pradesh and private investment increases, India’s domestic production could increase manifold over the next decade. This will not only reduce the import bill but will also create new opportunities for mining, processing and local employment. This beginning of private gold mining in India is not just the story of a new mine, but it could be the beginning of a renaissance for the sector. In the same way, in the environment of global tension, the Indian government also appealed to buy less gold because the import bill was increasing. In such a situation, if there are more mines in the country, it will prove to be good news for the government treasury also.
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