India’s first private gold mine: Inside Andhra’s Jonnagiri project that will produce 900 kg gold every year

India's first private gold mining project is here. On Wednesday (June 24), Andhra Pradesh Chief Minister N Chandrababu Naidu inaugurated a major gold mining and processing facility at Jonnagiri in Kurnool district.

The gold mining project is being developed by two private firms — Thriveni Earthmovers of Tamil Nadu and Geomysore Services of Karnataka, with an investment of Rs 405 crore. The Geomysore is in partnership with Deccan Gold Mines Limited.

The state CM laid the foundation stone of the facility for a second phase alongside state ministers Kollu Ravindra, Nimmala Ramanaidu, and TG Bharat. The project aims to boost domestic production, advance the "Made in India" ecosystem, and produce 900 kg of gold per year.

We take a look.

About the Jonnagiri gold mine project

The Andhra Pradesh government has allotted a total area of 1,500 acres. Mining is currently underway on 600 acres in the first phase of development.

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Interestingly, to facilitate the project's operations, the village Jonnagiri, where the project is taking place, has been symbolically renamed “Swarnagiri" by the state cabinet.

Lloyds Metals and Energy Chairman B Prabhakaran on Thursday (June 25) said Jonnagiri Gold Mine would reduce the country's dependence on imports and called it a "Made in India" refined gold value chain.

Thriveni's executive director, B Karthikeyan, told Moneycontrol: "Discovery and operation of a mine takes a lot of patience. It took us 7-8 years to completely discover the ore," referring to the patience that the mining project takes.

Ore recovery rates remain modest — ranging from 0.5 grams to 1 gram per tonne of material processed — and Karthikeyan said the company is looking for technological solutions in collaboration with global partners.

"If we put 1000kg of material (ore) into the crusher, the recovery would range between 0.5 grams and 1 gram," Karthikeyan explained the project process while speaking to the publication.

"There is a need for significant technological intervention to improve recovery. We are seeking suggestions from experts and collaborating with global players," he added.

Why does it matter

According to the Andhra Pradesh government, this gold mining story is similar to Karnataka's famed Kolar Gold Fields (KGF), which it describes as a landmark gold mining venture for the state.

The processing plant is expected to produce around 400 kilograms of gold in its first year of operations. The annual output is expected to rise to 900 kilograms in the second year, then gradually increase to 2 tonnes as processing capacity expands.

The project aims to create employment for nearly 700 people. Under the revenue-sharing arrangement, the state government will receive a 4 per cent royalty on the value of the gold produced.

Based on current projections, the government expects to earn about Rs 57 crore in royalty from an annual production of 400 kilograms, rising to around Rs 144 crore once production reaches 900 kilograms.

"Jonnagiri Gold Mine marks the beginning of a new chapter for India's gold mining industry. For decades, India has remained one of the world's largest consumers of gold while being heavily dependent on imports," said Prabhakaran in a press release, The New Indian Express reported.

According to Prabhakaran, the project currently has certified gold resources of around 13.1 tonnes, with ongoing exploration indicating significant potential to expand reserves across the wider mineralised belt.

First KGF, now Jonnagiri

Over its 120-year history, the Kolar Gold Fields (KGF) gave up an estimated 800-900 tonnes of gold and reached depths of nearly 3.2 kilometres, making it among the world's deepest mines.

Operations eventually ceased after the ore reserves dwindled, and the State abandoned it. The Swarnagiri project is now being positioned as the next major project in the country's gold mining sector.

According to Deccan Gold Mines, the project has an independently audited resource of about 8.2 million tonnes of ore with an average gold grade of 1.49 grams per tonne, containing nearly 12 tonnes of gold.

The Andhra Pradesh government has said the wider mineralised region could potentially hold up to 42.5 tonnes of gold. However, these estimates are based on exploration targets and have not yet been fully confirmed.

Unlike KGF, which relied on deep underground mining, Swarnagiri is being developed as an open-pit mine operation, where gold-bearing ore is extracted from the surface through large-scale surface excavation.

The inauguration of the Jonnagiri or Swarnagiri mining project comes at a time when global gold prices are at an all-time high and market volatility remains elevated, highlighting the significance of developing reliable domestic sources of the precious metal.

With inputs from agencies