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Kolar Gold Fields: Slow Fall of a Gold Colossus

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Kolar Gold Fields: Slow Fall of a Gold Colossus

John Taylor III, Founder of KGF

Photo: Bridget White
Kolar Gold Fields: A Gold Colossus For Centuries
  • 1st millennium BC: Tradition of mining gold at Kolar, India, started at least as early as the first millennium BC with linkages to the Indus Valley Civilization.
  • 5th century AD: The Champion reef at the Kolar gold fields was mined to a depth of 50 m during the Gupta period.

  • 9th-10th century AD: Gold continued to be extracted during the Chola period.

  • 1336 to 1560: Significant gold operation at Kolar during the Vijayanagaram Empire.

  • 1768: Kolar is taken over by the British.

  • 1792: The British gave Kolar to Tipu Sultan, king of Mysore. His reign (1782-1799) was strengthened by the gold extracted from Kolar fields.

  • 1873: M.F. Lavelle, a resident of Bangalore, is granted by the Mysore Government the exclusive privilege of mining in the Kolar district.

  • 1875: M.F. Lavelle sank a shaft near Uirgam (Oorgaum)

  • 1876: Finding that large capital would be required, M.F. Lavelle transferred all his rights and concessions to Major General G. de la Poer Beresford. General Beresford formed a syndicate known as the Kolar Concessionaries which took up the matter in earnest, and gradually acquired most of the area now known as the Kolar Gold Fields.

  • British John Taylor & Company did much of the prospecting and started large-scale mining with more skilled manpower and sophisticated machinery, providing tones of gold for the next 80 years.

  • 1902 : Kolar Gold Fields became the second city in Asia to get electricity after Tokyo, Japan. The first hydroelectric project in India was built to provide electricity for the gold fields.

  • 1905: As part of the Kolar gold fields, the following mines are: Mysore Gold Mine, Champion Reef Mine, Oorgaum Mine, Tank Block Mine, Balaghat Mine, Coromandel Mine, Oriental Mine, Nine Reefs Mine, Road Block Mine and Nundydroog Mine.

  • Champion Reef Mine eventually became the second deepest underground mine in the world at 3200 meters depth.

KGF: Gold Colossus With Feet of Clay (1947-)
  • 1947-1956: Following the independence of India, starts a period of intensive and unsustainable exploitation of the resources by the British concessionaire, taking into account the 1956 deadline for transferring mining rights to local authorities.

  • 1956: The mines were taken over by the Government of Mysore. KGF became the capital of Karnataka.

  • 1962: Ministry of Finance, Government of India took over KGF.

  • 1972: KGF was handed over to the government company Bharat Gold Mines Limited (BGML), under the Ministry of Mines.

  • Silicosis, "a form of pneumoconiosis caused by inhalation of crystalline silica dust" (along World Health Organization definition), was first identified in KGF.

    Bharat Gold Mines Limited has thus come out of various combinations and permutations, driving efficiency and productivity down year after year.

    No evidence of misappropriation of a part of the gold output has been found, though KGF employees and trade unions leaders still raise some doubts.

  • 1965: The particle experiments at Kolar Gold Fields, performed by a collaboration of particle physicists from Tata Institute of Fundamental Research (TIFR), Mumbai, Osaka City University, Japan and Durham University, UK recorded the first cosmic ray neutrino interaction in an underground laboratory in KGF mines. The experiments ended with the closing of the shafts in 1992.

  • 1992-93: 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 the reserves were close to exhaustion and that the company could not be turned around as a viable operation. KGF had been having losses since 1972 and only survived with the help of subsidies from the government.

  • Several other studies undertaken subsequently confirmed these findings.

  • 1998: The company was referred to the Board for Industrial & Financial Reconstruction (BIFR) for closure.

  • 2001: The gold mines of KGF were closed down by Bharat Gold Mines Limited (BGML) due to:

    1. Reducing deposits
    2. Increasing costs
    3. Decreasing price of gold from 1980 to 2001 (-65% in US/oz) (but +400% from 2001 to 2011!)

    The unions, fighting to save 3000 jobs, lost in both BIFR and in Appellate Authority for Industrial and Financial Reconstruction (AAIFR).

    The Ministry of Labour allowed closure under the ID Act (Industrial Disputes Act).

    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.

  • 2003: A Division Bench of the Karnataka High Court directed government to hand over the mines to employees.

  • 2006: In December, the Ministry accept to transfer at market price the mines to the employees, for them to restart mining operations.

  • 2009: In July, the High Court of Karnataka finalized the terms and procedure of transfer. No government action ensued.

  • 2010:The Union cabinet cleared the proposal to revive Kolar mines.

  • It appears now that the government may well recant from its earlier position, so the future of the Kolar gold mines remains uncertain.

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