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Veeshal Bakshi
New Delhi, Jan 3:Ministry of steel and mines has recommended winding up of loss-making state-run Bharat Gold Mines to the union cabinet.The ministry has also sought cabinet approval for allowing Bharat Gold to offer voluntary-retirement scheme (VRS) to employees who opt for the same within three months from the offer date. The mine company had 4,367 employees on its rolls as on October 1, 1998. The cost of VRS for these employees has been estimated around Rs 100 crore.
The government intends to convey its decision to wind up the company to the Board for Industrial Financial Reconstruction within two weeks of the cabinet approval.
The ministry decided to wind up the company, which had accumulated losses of Rs 343.38 crore as on March 31, 1998, after efforts to find a suitable private partner for a takeover bid proved futile.
Bharat Gold's performance has been falling for the last several years. Production touched a low of 514 kgs in 1997-98 compared to 692 kgs in 1996-97. Production cost was a whoppingRs 11,016 per ten grams during 1997-98. The total plan and non-plan loans outstanding as on March 1998 were Rs 76.57 crore and Rs 86.60 crore. The penal interest on both loans stood at Rs 130.54 crore.
Reasons attributed to the Bharat Gold's downturn include, fall in the grade of gold from a high of 47 gramme per tonne to the present three gramme per tonne, high operational costs, surplus manpower, increase in power tariffs and overhead expenditure. At the same time, average realisation per 10 gramme of gold fell to Rs 4,356 in 1997-98 to Rs 5,097 in 1996-97.
The centre floated advertisements inviting private partners in May 1997 and appointed SB Billimoria & Company for assistance in identifying a suitable co-promoter. It shortlisted two prospective partners - Northern Resources USA and Karnataka Gold Mining of Australia. However, both the bidders were found unsuitable after detailed scrutiny of their proposals.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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