Rightly the government has decied to abandon the mining for the time being. The per tonne cost of imported tungsten concentrates (65 per cent wolframite) is presently put at around Rs 75,000 whereas the cost of production at Degana is hovering around Rs 4.50 lakhs per tonne. Such low prices have forced Hindustan Zinc Ltd, the mining company, to stop mining at Degana, the only reserve of tungsten found in the country.

The mining of the metal has been in progress since 1916 at Degana intermittently and it got a fillip when RSMDC (Rajasthan State Mineral Development Corporation Ltd) got interested in it due to its huge potential. In fact, it formed a separate body, Rajasthan State Tungsten Development Corporation Ltd, in 1991 to take up the reserves at Degana when report came in of the growing number of buyers of the metal.

The Corporation established contact with Defence MetallurgicalResearch Laboratory of the Ministry of Defence and it showed lot of interest in the development of the Degana reserves. It even gave Rs three crore to the Corporation to take up the mining (of tungsten) in right earnest. It recommended the setting up of a beneficiation plant to treat the low grade ore of tungsten which varied from .08 per cent to 0.1 per cent. As compared to this the ore found in China had the grade as high as two per cent. In Indonesia too the grade was 1.5 per cent on an average.

With the Defence Metallurgical Research Laboratory having developed interest in the tungsten ore HZL did not lag behind and it negotiated with Rajasthan Tungsten Development Corporation Ltd for the take over of the entire mines. As the government did not have the adequate resources to continue with the mining of tungsten, it handed over the deposits to the PSU.

Initially HZL showed lot of interest in the reserve so much so that it even spent around Rs 5 crore to set up the beneficiation plant to treat the lowgrade ore. According to KVK. Seshavataram, chairman of HZL, the ``poor metal content, accompanied by a crash in the international price and the inadequate tariff, has rendered the operation of the Degana mine uneconomical''.

HZL has decided to close the mines in the absence of the ``supporting measures'' forthcoming from the concerned quarters. The Chairman said that steps had been taken to give back the mines to the government.

In terms of 65 percent W03 the total deposit of tungsten at Degana is put at around 3565 tonnes (concentrates).

Informed sources are of the view that having established the beneficiation plant HZL should not have given up the mining and the treatment process as the deposit has been found to be quite good. With the HZL not in the line now the country has to depend entirely on imports to meet its needs.

Right now due to the slump and the recessionary trends in the global market, the imported cost is on the lower side but it could go up substantially if the global demand picksup.

Sources in the government say that a fresh look at the Degana depositis is being given with a view to restarting the operations. Much will depend on how to reduce the mining cost. One could not help so far as the low grade is concerned. If the government is ready to give some sops, the mining could even be taken up in the private sector.