Bharat Gold Mines Limited

Bharat Gold Mines Limited or in short BGML is a public sector undertaking of the government of India.

Introduction

The Bharat Gold Mines Limited is a PSU under the administrative control of the Ministry of Mines and is now closed. It was set up in 1972 to operate the Kolar Gold Mines taken over by the central government from the government of Mysore. It was primarily engaged in gold mining from its captive mines in the Kolar Gold Fields (KGF) located mainly in Karnataka but partly also in Andhra Pradesh. Towards its last years the company also undertook mine development, shaft sinking, manufacture of mining machinery and other fabricated items for outside clients for which it set up a Mine Construction and Engineering Division. Until the time of its closure, BGML was the only world-class gold mining operation in India. The only other gold mine in the country, viz. the Hutti Gold Mine owned by the Karnataka government, is a minuscule operation and is not recognized as a proper gold mine by world standards. During its heyday, BGML's Kolar Gold Mines added to the glory of India as one of the great gold mining operations of the world and Kolar was known as the largest gold production centre in Asia (Ore & Industry in the Far East by H. Foster Bain - NY Times Review, 1927)

The Kolar Gold Mines of BGML were closed down in the year 2001 as the gold ore reserves got exhausted after 150 years of continuous and heavy extraction. Both the exploration agencies of government viz. the Geological Survey of India (GSI) and the Mineral Exploration Corporation Limited (MECL) declared that mining the meagre remaining reserves was not a technically or economically viable option. At the time of its closure BGML had run up losses of more than Rs. 900 crore.

History

Though proper mining operations at Kolar started only in 1880 the actual mining of gold ore itself is stated to go back many centuries. There are archival references to the Cholas of south India running small mining pits in the region and there are some references to Kolar being important for similar reasons under the Vijayanagaram rulers. Hyder Ali and Tipu Sultan attempting to extract gold from the Kolar pits with the help of French geologists is a recorded concern of the East India Company factors. Certainly, after the defeat of Tipu Sultan in 1799 and the "discovery" of gold in Kolar by surveyor Captain John Warren in 1802, there is curtain on Kolar till about 1850 when Michael Lavalle turned up in England and settled in his estate as a gentleman who made his fortune from the gold mines of Kolar. A joint stock company floated in England by Lavalle & his associates applied for a proper mining license from the Mysore government in 1873, which license was then sold to the British John Taylor & Company.

The current mines have an official history of about 130 years, beginning from 1880 when the first mines under a License were started by John Taylor & Company. Owing to the secret nature of the operation and the tight security under which it worked the owners preferred to import labour from the neighbouring state of Tamil Nadu and successive generations of these Tamilian (mainly dalit) workers continued to work in the mines. As operations expanded some people from the surrounding areas were also inducted in the labour force. The small town of KGF was born as a habitation of these mainly tamilian dalit and a few hundred kannadiga workers on the outside and a core group of about 100 to 200 British Colonial, including Anglo-Indian, families on the inside. Even today KGF is a small centre of an eclectic Tamil-Kannada culture.

Changing hands

The Kolar Gold Mines were taken up for systematic exploitation by John Taylor & Sons in 1880. The next 60 years saw the mines gaining name and fame with the word "Kolar" becoming a synonym for gold in India. After independence in 1947 it was decided to nationalise the mines and in 1956 they were handed over by John Taylor & Co. to the government of Mysore for being run as a state enterprise. With the Gold Control Act in 1960 the Finance Ministry of the central government took over the mines and gave the national Mint the exclusive rights to all gold from Kolar. In 1972 the Bharat Gold Mines Limited (BGML) was established by the government of India under the Ministry of Mines and the Kolar mines were handed over to the BGML to be run as a PSU of the central government.

By that time the last three remaining mines of Kolar viz. Mysore, Champion and Nandydroog were already beginning to run their course. During the next 20 years the miners had to go deeper and deeper for the remaining gold until at 3000 metres Kolar came to be known as the second deepest mine in the world. The quality of gold ore also started steadily deteriorating from the once amazing 14 g/t to <4g/t. By 1992 the net worth of BGML was fully eroded. By 1998 the reserves came close to exhaustion and the cost of extracting gold exceeded the price of gold by more than ten times. Several studies carried out by experts concluded that the time had come for Kolar to pass into history.

Glory Days

The Kolar Gold Mine, as a collectivity of three mines, viz. Champion, Mysore and Nandydroog, at the Kolar Gold Fields was one of the largest and deepest Gold Mines of the world and the only recognized gold mine in India. Because of these mines Kolar has several firsts to its credit. In 1894 Kolar was the first to get a metre gauge rail connection to Bangalore. In 1900 the Cauvery Power Scheme was inaugurated and Kolar became in 1902 the first town in South India to get hydro-generated electricity from the Shivanasamudram dam. In 1902 the town of Robertsonpet was established to house the Kolar related tertiary sector populace. In 1903 the Bethmanagala lake was created as a source of drinking water for Kolar and the surrounding townships. Mahatma Gandhi visited Kolar in 1942 as an important stop for the Quit India movement. KGF (Kolar Gold Fields) was always on the top of the list, crowned as one of largest Gold Producers in Asia and the sole gold mining operation in India. In its hey days Kolar was the most important source of gold first for the British Raj and then the Government of India.

Silicosis, Health Care & Human Rights

After the beginning of large scale mining, the workers at Kolar became prone to various diseases related with breathing and lungs. Silicosis was one of them. It is a progressive disease affecting the lung and is caused by inhalation of the fine silica dust from the mines over many years. This disease was identified and diagnosed in the workers of the Kolar Gold Mines immediately after BGML took over operations in 1972. Treatment of Silicosis was taken up as a health care priority by BGML and the disease was successfully tackled and preventive measures put in place. BGML ran a multi discipline hospital and poly clinic for its employees and the local people and concentrated efforts were made to diagnose and treat miners for all mining related ailments. With the closure of BGML the hospital also closed down and much suffering resulted. Recently, a local NGO run by a well known philanthropist from the area decided to intervene and it is currently in the process of rejuvenating the hospital.

The devastating effects of the closure of BGML on the township of Kolar and the lives and health of its people have been starkly brought out in the PUCL Bulletin of May 2004 which carried a Report by Justice H. Suresh, Dr. Jeevan Kumar, Geetha Menon, and Advocate Manohar Hosea after a Public Hearing on "Violations of Rights of Workers at the Kolar Gold Fields". The public hearing was organized by the South India Cell for Human Rights Education and Monitoring (SICHREM) on 21 February 2004. Earlier, in a brilliant article published in the Liberation (2001), N. Divakar brought out in graphic detail the comprehensive misery inflicted by the government and the management on the ex-employees of BGML (The Decay of a Public Sector Mining Township – Social Investigation). This has been further elaborated upon by Parvathi Menon in the Frontline magazine (Volume 19, Issue 11) of May 25 – June 7, 2002 in an article titled “Death of a Mine” in which, she describes in chilling detail the descent of the thousands of ex-employees of BGML and their families into indebtedness, destitution and death by suicides.

Closure

Although the mines were formally closed in 2001 the history of closure goes back to 1992-93 when the formal decision to close down the mine was taken by the Government of India on the basis of the Chari Committee Report. The Report stated that not only were the reserves close to exhaustion but the company which had been making losses from the very beginning (1972) could not be turned round as a viable operation and could only survive with continuous and heavy subsidies from government. In fact from 1992 itself the company was surviving with the help of subsidies from GOI. Several other studies undertaken subsequently confirmed these findings. In 1998 the company was referred to BIFR for closure. A bitter struggle between the unions and management ensued. The unions were keen to save the jobs of their 3000 members and government was bent upon closing down the operation which required continuous support from the tax payer. The unions lost in both BIFR and AAIFR. The Ministry of Labour also abandoned the unions and permitted closure under the ID Act. The main argument of the unions was that if the government could not run the mines they should hand them over to labour. BGML being the only gold mine in India and its geologists and engineers being the only gold mining experts in the country the employees were confident that they could not only extract the remaining reserves economically but also extract the very low quality gold from the tailing dumps or the over burden discarded as useless mounds of earth over several decades. This would enable them to remain in operation for at least another 30 years. The Ministry of Mines wanted to liquidate the assets through the court liquidator so that loans advanced by government to BGML could be recovered. The unions claimed in court that the hidden agenda was to sell off the BGML lands for real estate development. Finally, in 2003 a Division Bench of the Karnataka High Court directed government to hand over the mines to labour strictly for the purpose of revival of mining operations.

Re-Opening

The decision of the Karnataka High Court was accepted by the Government of India at the highest level, viz. the Union Cabinet, in its meeting held on 27 July 2006. The Company Court was informed accordingly by the Ministry of Mines in a sworn affidavit in December 2006. The proposal of the government to hand over the mines to the employees' federation at a price to be determined through a global tender was approved by the High Court in July 2009 and confirmed in a Review petition filed by government a few months later. However, after that the picture became blurred. All movement on the revival front from the Ministry of Mines came to a halt and there was no sign of the tender. It was speculated in some circles that the rise in the price of gold could be inducing government to go back on its decision to let the unions run the mines. Others saw the hidden hand still at work since no matter how high the price of gold goes the resources are too meagre to make mining operations viable enough to justify government intervention through the public exchequer. In early 2010, the Ministry of Mines suddenly decided to go in appeal to the Division Bench seeking changes in the Tender Document approved by the single bench. In February 2010, in the course of hearing before the Division Bench the advocate of the Ministry of Mines informed the Karnataka High Court that the Government has decided to revive the mines on its own. In the light of this decision the Division Bench quashed the single bench order. However, since there was no further progress in the matter even after several months the unions filed a Review Petition in which they challenged the very authenticity of the statement made on behalf of the Ministry in the court but the court would have none of it. The plea of the unions was turned down without obtaining any kind of commitment from the government about revival.

Update

As of April 2011 the ill lluck of the ex-employees of BGML continues without any light at the end of the tunnel. The government confirmed in an answer to a parliament question that it has no plans for the revival of BGML on its own. In spite of this the Review Petition of the unions to permit them to revive the mines was turned down by the court without any direction to the government. Last time the court took 6 months to release its order. It is anybody’s guess how long it will take this time as more than 8 months have already passed since it delivered its oral order rejecting the Review petition of the Employees. Even after the order is released it is not known whether the employees have the funds for appealing in the Supreme Court. If not then it can be said that BGML is finally dead and the employees stand betrayed even by the Indian judiciary which was their last bastion of hope.

Further Update More than a year has now (August 2011) elapsed since the oral order was given by the court in the Review Petition but there is still no sign of the written order. No appeal can be filed unless an order is released and a certified copy becomes available. In the Indian judicial system there is no remedy if a judge refuses to release his order. Fed up of waiting for the order in the Review Petition the Employees' Forum has now appealed against the Division Bench Order directly in the Supreme Court as if the entire review petition episode never happened. Surprisingly the Government of India has also moved the Supreme Court against the Division Bench order admitting that the earlier statements made in the high court on its behalf were not authentic. This is thanks mainly to the departure of the earlier minister and arrival of a new minister in the mines ministry who is known for his acumen. Even more fortunately the matter is listed before the Hon'ble Chief Justice of India himself, a judge who is renowned for his integrity, diligence and a no nonsense approach. Thisdevelopment has rekindled once again the hopes of the ex employees of BGML who now see a ray of light at the end of a miserable tunnel.

Supreme Court Delivers Verdict

On 9 July 2013 the Supreme Court finally gave its nod to the Union government’s plan to float a global tender to revive Bharat Gold Mines Ltd. thus bringing relief to over 250 thousand citizens of Kolar Gold Fields and 3000 families of the mine workers.

The mines were closed 12 years ago, a decision that has been fought by BGML employees in several courts. The Supreme Court has set aside the Karnataka High Court Division Bench order which decreed that the union government should run the mines on its own ruling out the option of tendering. This decision ignored the fact that BIFR had spent more than 4 years in examining how the government could revive the mines and in the end reached the same conclusion as the Chari and other committees that the mines could not be revived without risk investment and off-the-shelf technology which was not possible for the government to do.

The President of the BGM Officers Supervisors & Employees United Forum & BGM All Employees Industrial Co-operative Mr K M Divakaran has expressed his satisfaction at the outcome and was quoted telling the press that in the end everything has gone well for KGF and the employees and their families who are now eagerly waiting for the tender process to begin.

The Union Government on 19th September 2013 released the Bid Document for appointing Service providers by 9th October 2013, they will Assist BGM for Release of Tender in compliance with the Cabinet Decision dated 27 July 2006/Company Bench of HC of Karnataka Order dated 3 July 2009 for Revival of Mine operations. The Tender will be released before 3rd week of November & will be kept open for Three months and will be finalised by 2nd week of February 2014. Before Six weeks from then the Final Agreement for Transferring the Assets & for re-opening the Mining Operations which was awaited for more than a decade will begin.

Tender Process Begins

Government has invited bids from consultancy firms to be roped in as "service provider" for the proposed sale of Bharat Gold Mines (BGML) through competitive bidding route. "BGML intends to offer for sale the assets of the company like land, buildings, gold ore, reserves/resources, tailing dumps, plants and machineries, equipment etc located in Kolar Gold Fields, Karnataka; Bisnatham Mine and Chitargunta Mines in Chittur District and Ramagri Mines in Ananthapur District of Andhra Pradesh, through global competitive bidding route," the Mines Ministry said in its website. "BGML intends to select and appoint a service provider for this purpose," it said, inviting bids from merchant and investment banks and consultancy firms. The role of the service provider would be to update the existing documents prepared in 2008 titled "Request for Proposal" and "Memorandum of Information" and assist in determining the Reserve Price for the assets put on block. It would further assist in selection of the successful bidder for the assets through global bid process including in holding pre-bid meeting, opening and evaluating bids and advise on selection of the successful bidder. "The service provider will eventually assist in finalising and executing an Agreement for transfer of the assets to the successful bidder," it said. Interested parties have been asked to submit their bids to the company by October 9. The President of the Employees Co-operative society & Chief Engineer, Mr Divakaran and the vice president, Mr Anandaraj have welcomed the move and thanked the GOI on the employees behalf. By January 2016 gold mines will open told by Y.Ramakka(MLA of kolar gold fields).

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