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 Baghmara gold mine in Baloda Bazar district was auctioned by the Chhattisgarh state government.

The mine is one of the oldest explored deposits of gold in central India. It is estimated to have a reserve of 2700kg and, according to mining officials, this may increase once it is explored at depth by Vedanta.

The mine is about 140km northeast of Raipur and is expected to earn more than Rs81.40 crore to the Chhattisgarh government in addition to existing royalty of Rs24.70 crore.

Chhattisgarh officials said the auction resulted in aggressive bidding and ended after almost 13 hours, with more than 160 bids submitted. Vedanta had the highest bid of 12.55% of the Indian Bureau of Mines price of Rs74,712 (US$1087) per troy ounce. 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, 2015. The four companies that participated in the gold auction were Rungta Mines, Vedanta, Krishna Global Minerals and Sainik Mining & Allied Services.

Vedanta said the block measured 6.08sqkm and required extensive exploration, which 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 import 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.

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

In mid-February a successful auction was held for the Karhi Chandi limestone block in Baloda Bazaar and on the following day for Kesla limestone block in Raipur district. The Karhi Chandi block thus became the first non-coal mining lease to be auctioned in India with both attracting strong interest. The limestone mines at Mohra East and Mangsa Pauni Khauna will be auctioned later this year while next year Chhattisgarh expects to put other iron ore, bauxite, limestone mines up for auction.