Indian miner NMDC plans $61 million investment in first gold block

State-owned Indian iron ore miner NMDC is likely to invest around 5 billion rupees ($61 million) in its planned first foray into gold mining, a source with direct knowledge of the matter said on Monday.

NMDC is “on track” to secure a lease for the Chigargunta-Bisanatham gold block soon, having signed a letter of intent over the project with the state government late last year, the source said.

According to local rules, it must secure the mining lease for the gold block within three years of signing the letter of intent.

The block, located in the Chittoor district of the southern state of Andhra Pradesh, has estimated gold reserves of around 1.83 million tonnes, containing 5.15 grams of gold per tonne, the source said.

The company plans to appoint a consultant to help seek government clearances, such as environmental approvals, the source added.

The source did not wish to be named, as investment details are not public.

Gold is a must-have at weddings and festivals in India, the world’s biggest gold consumer after China.

India meets more than 90% of its gold demand through imports, spending $36.6 billion on overseas purchases of the precious metal in 2022, and a record $55.8 billion in 2021.

Currently state-run Hutti Gold Mines Co Ltd, based in the neighbouring Karnataka state, is the country’s only major gold producer.

(By Neha Arora and Mayank Bhardwaj; Editing by Jan Harvey)