NMDC to invest $61 million in first gold block

27 Jun 2023 , 01:55 PM

A source with direct knowledge of the matter said on Monday that 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.

According to the source, NMDC is ‘on track’ to secure a lease for the Chigargunta-Bisanatham gold block soon after signing a letter of intent with the state government late last year.

As per the local regulations, it is mandatory to obtain the mining lease for the gold block within three years of the letter of intent being signed. The block is situated in the Chittoor district of Andhra Pradesh, a southern state in India. 

According to the source, the estimated gold reserves in the block amount to approximately 1.83 million tonnes, with an average gold content of 5.15 grams per tonne. 

The company intends to hire a consultant to assist in obtaining government clearances such as environmental permits. The source declined to be identified because investment details are not public.

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

India imports more than 90% of its gold demand, spending $36.6 billion on the precious metal in 2022, up from a record $55.8 billion in 2021.

At around 1.42 PM, NMDC was trading at Rs 104.70, down by 0.095% against the previous close of Rs 104.80 on NSE. The counter touched an intraday high and low of Rs 105.90 and Rs 104.60 respectively.

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