Bharat Gold Mines Limited - Closure

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.