The private gold mine situated at Kunderkocha under Potka block of East Singhbhum district was expected to commence commercial production from March 2004.
Work at the mine site was inaugurated on December 3. It would initially extract 100 tonnes of crude gold ores per day and process them at an adjacent plant.
Expected yield was nine grammes of gold from every tonne of crude ore, said Dr A K Chakraborty, senior geologist of Manmohan Mineral Industries, the mining leaseholder of 48.5 acres of land.
A survey conducted by MMI between 1994 and 1996 has indicated deposit of 1.25 lakh metric tonne of gold ores in the region.
Gold was extracted by the British till 1948. The cost of extracting a gram of gold would be around Rs 400-500.
The area lacked infrastructure like roads and electricity. The 16-metre deep mine was water-logged and needs to be drained.
MMI would revive the mine, set up a processing plant area and install generator sets at a cost of Rs 6 crore (Rs billion). Dr Chakraborty said the mine would provide employment to nearly 200 locals.
MMI has applied for lease of another 35 acres in the region for mining. MMI would be paying royalty of Rs 11 to the state government for every tonne of ore extracted from the mine.
Several companies have applied for mining rights in Jharkhand. The state has invited a South African company to search for diamonds in the province.
De Beers has reportedly expressed interest in exploring for diamonds. Geological Survey of India would survey parts of Jharkhand as well.
GSI had launched a survey to find gold reserves in the state and found four locations bearing gold deposits.
