Revive KGF, stop mining paralysis

Mon Aug 03 2026

At a time when the prime minister has urged Indians to reduce their appetite for imported gold, the most effective response is to boost domestic production by reviving KGF. Andhra Pradesh's commissioning of the Jonnagiri Gold Mine, India's first private-sector primary gold mine since Independence, marks a milestone for the country's mining sector.

The state is preparing several more gold-bearing blocks for auction to attract private investment and reduce imports. In contrast, India’s most famous gold mine at Kolar Gold Fields (KGF) in Karnataka continues to languish despite repeated promises of revival.

The now-defunct Union government undertaking Bharat Gold Mines Limited (BGML), which operated KGF, was shut in 2001 after falling gold prices, mounting losses, and years of mismanagement rendered operations unviable.

During its century-long history, BGML produced nearly 800 tonnes of gold. The Union Ministry of Mines itself informed the Karnataka High Court that reserves worth around Rs 8,000 crore may still be underground. The prolonged neglect of KGF is, therefore, difficult to justify.

In 2006, the Union Cabinet approved handing over BGML's assets to the Employees Forum after valuation and global bidding, with the employees retaining the right to match the winning bid.  Ernst & Young prepared the bid documents, which were approved by the Karnataka High Court and later upheld by the Supreme Court. Yet, nearly two decades later, the project remains mired in bureaucratic delays.

The Employees Forum says it has repeatedly petitioned Prime Minister Narendra Modi for intervention, but to no avail. Meanwhile, BGML's nearly 20,000 acres of freehold land, strategically located along the Bengaluru-Chennai Industrial Corridor, faces steady encroachment, increasing the urgency for decisive action. The Centre's latest proposal to auction the tailings dumps — mounds of mine waste left behind after decades of gold extraction — has also raised legitimate concerns.

Modern technology can recover significant quantities of gold from the 33 million tonnes of processed ore, making the dumps commercially attractive. However, employees argue that separating this asset would weaken the case of reviving the underground mines as an integrated project, an apprehension that cannot be ignored.

At a time when the prime minister has urged Indians to reduce their appetite for imported gold, the most effective response is to boost domestic production by reviving KGF.  Rather than allowing legal and administrative uncertainty to persist indefinitely, the Centre should constitute an expert committee comprising representatives from the Union and Karnataka governments, mining specialists, financial experts, and the Employees Forum.

It should submit a time-bound roadmap to resolve the remaining legal hurdles, and recommend a viable revival strategy. India cannot afford to let one of its richest mining legacies remain buried under official indecision.

Source: https://www.deccanherald.com/