The Hindu Business Line : Bharat Gold Mines seeks review of assets sale proposal

Kolkata, Sept. 14 Bharat Gold Mines Ltd (BGML) has filed a review petition with the Karnataka High Court opposing some of the modifications as suggested for incorporation in the documents for a proposed global tender for sale of the assets of the company. The modifications were suggested in the court’s ruling in July.

Mr B.L. Bagra, Managing Director, BGML, told Business Line that the Union Ministry of Mines, following an inter-Ministerial Group meeting on August 5, decided to file the review petition.

The inter-Ministerial Group, comprising the Ministries of Finance, Company Affairs, Divestment, Law & Justice and Mines, examined the modifications as suggested by the court and felt that certain modifications were not practicable as these would defeat the purpose of asset sale to realize maximum valuation.

The High Court had modified the BGML’s proposed pre-qualification criterion that any metal mining company, domestic or overseas, was eligible to participate in the bid. But the company suggested according 20 times higher weight to a bid from existing gold miner than that from any other mental miner.

As the court had narrowed down the criterion to bidders only with gold mining experience, it was felt that the modification would rule out participation of local players. There is hardly any company with gold mining experience in the country.

Meaningful and wider participation from the global players also might be limited if this condition was incorporated, the Inter-Ministerial Group felt.

The other condition that was found unacceptable was relating to the society of former employees’ first right to match the preferred bid or refuse. Instead of higher one of the reserved price and top bid price, the court recommended the society should be given choice to match the lower of the two.

The mining operations at BGML stopped and workers had been paid-off compensation in 2000. BGML had begun winding-up proceedings in 2001.

The recent rise in the gold prices has raised the hopes of a possible revival of deep underground operations at the company’s mines at Kolar. Though no employee is there on the BGML’s rolls now, a board of directors continues to exist as the revival proceedings are on.

Among the key assets of BGML are underground mines with gold deposit below 3000 metres, 12,000 acres of land, dumps containing around 90 tonnes of gold (as per a study conducted in 1999), mining related machineries, 5,000 residential houses and a township infrastructure with closed hospital and schools.

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