'Let's change this...': Vedanta's Anil Agarwal urges govt to privatise gold mining in India to boost production
Thu July 11 2024
Anil Agarwal, Chairman of Vedanta Group, suggested that the government should focus on steps to ramp up the country’s gold production to reduce dependency on gold imports. The Vedanta chairman in a post on X (formally Twitter), shared light on the country’s forex situation and wrote “it is so amazing to see RBI buying gold for its reserves. Thirty-three years ago, in early 1991, RBI had to ship its gold overseas so that we could get forex to help deal with our economic crisis. How well we have done since then!”
Agarwal she light on the country’s reliance on imports to meet almost all of its demand and called for a change in the situation. “But it’s a paradox that our gold production today is only 1.4 tonnes per year. We import 99.8% of our gold requirement. Let’s change this,” he wrote.
The chairman of the mining major called for privatising the now closed Bharat Gold Mine and Hutti Gold Mine where production is stagnant. With investment and technology, these mines have huge potential to produce gold, generate jobs and save forex, he said. The selling of any public sector asset in pieces will never serve the larger national purpose, Agarwal said.
The incoming entrepreneur should have a proven track record, the ability to take measured risks, access the required funds, bring in the best of experts and the latest technology, and move ahead without retrenching a single employee, he added. Meanwhile, Agarwal on July 10 said that the group is going ahead with the proposed demerger of its businesses that will lead to formation of six firms and unlocking of massive value.
The company has received approvals from the majority of its creditors for a proposed demerger of businesses. Addressing shareholders during the 59th Annual General Meeting, the chairman said, “We are going ahead with the demerger of our businesses, which will lead to the creation of 6 strong companies, each a Vedanta in its own right. This will unlock massive value.”
Each demerged entity, he said, will plan its own course but follow Vedanta’s core values, its enterprising spirit and global leadership. Each entity will have more independence with regard to capital allocation and their growth strategies, the chairman said, adding investors will have the freedom to invest in the industries of their choice, broadening the overall investor base for Vedanta assets.
“For every one share of Vedanta Ltd that shareholders currently own, they will additionally receive one share of each of the five newly listed companies,” he said.
Bharat Gold Mines Limited
Bharat Gold Mines Limited (BGML), erstwhile public sector undertaking was incorporated in April, 1972 under the administrative control of Department of Mines with its office at KGF. BGML was engaged in (i) mining and production of gold mainly in KGF and (ii) in a few smaller operations in Andhra Pradesh. When the BGML operations become economically unviable, operations of BGML were closed with effect from 01.03.2001. In 2006, the Cabinet had decided to dispose the assets through a global tender with first right of refusal in favour of the ex-employees society.
Hutti gold mines
Hutti Gold Mines is a company owned by the Karnataka government that operates two mines in Raichur district. Hutti is the only active gold mine in India, producing about 1.8 tonnes of gold per year. The mine has a history of over 2,000 years, as it was mentioned in the ancient Hindu texts of Mahabharata and Ramayana. The mine uses both underground and open-pit mining methods, and has a processing plant that can handle 3,000 tonnes of ore per day.
Source: https://www.businesstoday.in