India's National Mineral Development Corporation beat giants Adani and Vedanta in an e-auction for a gold mine located in the Chittoor district of the southeastern state of Andhra Pradesh.
According to the Press Trust of India, this is the first time the state-owned company takes on gold mining in the country.
The Chittoor mine site is called Chigargunta-Bisanatham and it extends for 263.01 hectares. Government officials told the news agency that it has estimated reserves of 1.83 million tonnes containing 5.15 grams of gold per tonne.
Chigargunta-Bisanatham will be an underground mine and it would mark the first time the NMDC develops this type of operation. First production is expected two years after the permitting process is done.
Initial investment is estimated about $4.5 billion. India's federal government would get 38.25 per cent revenue on sale value.
In recent years, the Mineral Corporation has been focusing efforts on gold mining. It is currently developing the Bulyang Ombe gold mine in central Tanzania and at the same time its Australian subsidiary, Legacy Iron Ore, is exploring as many as 17 gold tenements in the Western Australian region.