Global diversified natural resources company Vedanta Limited has won India’s first ever auction of a gold mine as the nation opens up the sector to private companies to curb overseas purchases of the metal that cost it $36 billion last year. The mine was auctioned by the Chhattisgarh state government.

The Baghmara gold mine is in Baloda Bazar district, about 140km northeast of Raipur, and is one of the oldest explored deposits of the precious metal in central India. It is estimated to have a reserve of 2700kg and, according to mining officials, the reserve may increase once deep mining is explored by Vedanta.

Chhattisgarh officials said the auction process resulted in aggressive bidding and ended after almost 13 hours, with more than 160 bids submitted.

Vedanta quoted the highest bid of 12.55% of the Indian Bureau of Mines price of Rs74,712 (US$1087) per troy ounce. One troy ounce is 31.10 grams. The auction is expected to yield Rs82 crore to the state exchequer in addition to the royalty of Rs25 crore.

The state government invited bids for the granting of mining leases through the auction of one gold block and four limestone blocks on December 8 last year. The four companies that participated in the gold auction were Rungta Mines, Vedanta, Krishna Global Minerals, and Sainik Mining and Allied Services.

Vedanta said the block measuring 6.08sqkm required extensive exploration and that the process would commence in ‘due course’.

India imports about 1000 tonnes of gold every year and the precious metal is the second-highest component of the imports bill after crude oil. Last year, a gold monetisation scheme was launched aimed at reducing physical gold demand and luring tonnes of gold from households into the banking system. An estimated 20,000 tonnes of gold lies with households and temples in India.

Federal Mines Secretary Balvinder Kumar recently told Reuters that the government planned to auction at least three gold mines in 2016.