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Gold Mining: India’s gold output could rise multifold if hurdles removed: WGC

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Gold Mining: India's gold output could rise multifold if hurdles removed: WGC


Mumbai – India’s annual gold production could soar from just 1.6 tonnes to 20 tonnes if the government removes bureaucratic hurdles and encourages investment in the sector, the World Gold Council (WGC) said in a report on Thursday.

The South Asian country is the world’s second-largest consumer of the metal and meets most of its needs through imports. Higher local output could help New Delhi limit imports.

India spent a record $55.7 billion on gold imports in 2021, buying 1,050 tonnes, the highest level in a decade and well ahead of the 430 tonnes it imported in 2020.

Somasundaram PR, Regional Chief Executive Officer, WGC India, said: “It makes sense for India to develop mining capacity. But for this to happen, changes are needed, legacy barriers must be significantly reduced and investment encouraged.”

In India, obtaining a mining license is a lengthy process that requires approvals from multiple agencies, which hinders investment, especially from multinational corporations, the commission said.

It said in the report that most gold mining areas are located in remote areas with poor road and rail connections, making it difficult and expensive for materials to travel to and from the site.

Currently, the Hutti gold mine in the southern state of Karnataka employs more than 4,000 workers and contractors and accounts for the majority of India’s output.

Gold mining could provide employment for an additional 3,000-4,000 people, but it would need to attract more than $1 billion in investment to convert the resource into reserves and eventually build the mine, the WGC said.

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