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Friday 10 July 2020

Sonbhadra Gold To Benefit Indian Economy In 5 Ways

The Geological Survey of India (GSI) has detected the presence of about 3,000 tonnes of gold beneath the earth in the Sonbhadra district of Uttar Pradesh. This is approximately 5 times the current total gold reserves of the country. Geological experts say that the entire gold deposit here could weigh 5,200 tonnes if the hills are further explored.

Sonbhadra District Mining Officer KK Rai said on Saturday that GSI had detected the presence of about 3,000 tonnes of gold in the Sone Pahari and Hardi areas. He said that GSI had started the work of finding gold in Sonbhadra in the year 1992-93.

The authority will start the process of an auction for these blocks through e-tendering.

The officer said that there were estimated to be about 2,943.26 tonnes of gold beneath the Sone hills and about 646.16 kg of gold in the Hardi block. Besides gold, some other elements have been found in these areas.

Rai said the government was considering putting these deposits on lease for mining. The authority is conducting a survey for the purpose.

A seven-member team visited the area on Friday for geo-tagging and mapping of the goldmine. The team will submit its report to the Directorate of Geology and Mining by 22 February.

The Union Ministry of Forest and Environment is the authority that makes the decision to allow mining in the wildlife sanctuary area. A report will be sent to the Centre regarding the e-tendering of gold reserves in Son Pahadi and Hardi of Chopan block of Sonbhadra.

Sonbhadra gold’s significance in economy

This gold found in Sonbhadra is about 5 times the total gold fund of India, which is priced at around Rs 12 lakh crore. According to the World Gold Council, India currently has 626 tonnes of gold reserves.

It is believed that the British started the work of finding gold in Sonbhadra. The largest district of Uttar Pradesh, Sonbhadra shares its borders with four states: Madhya Pradesh, Chhattisgarh, Jharkhand and Bihar.

The finding makes Indian gold reserves’ volume next only to the US’s. The US has 8,133 tonnes of gold while Germany (currently at number 2) has 3,366 tonnes of gold.

Union minister Hardeep Singh Puri reacted to the discovery, saying, “The massive Gold discovery in Sonebhadra will further catalyze the growth of this beautiful aspirational district, bring positive change in the lives of the people & usher an era of transformation.”

Sonbhadra gold would mean India would not have to import gold for the next five years. This will save us foreign currency reserves. As per the World Gold Council data, India had imported 646 tonnes of gold in 2019.

Sonbhadra gold

The world market demands about 4,000-4,500 tonnes of gold. While 5,200 tonnes of gold may satisfy the Indian hunger for jewellery for the next eight years and the global gold demand for about a year, that is not how a nation’s gold reserves are supposed to be exploited.

  1. It was noticed recently that gold prices had shot up in India. This meant that people were feeling insecure about the economy. They were seeking some security for their future in the form of gold, which was shooting the price up due to the higher demand. Once the gold from Sonbhadra becomes usable, the sudden availability of so much gold will reduce the demand. By this relation, India can be said to have become a better economy.
  2. While gold is no longer used as a currency, unlike in the ancient world, it still influences currencies. There was an era in contemporary history when gold was used to back fiat currencies, a legacy from the Byzantine Empire. US President Richard Nixon discontinued this regime, referred to as the gold standard, in 1971. Until then, a country could print currency in proportion to the volume of gold it had. Some economists say the world must return to the gold standard because the US dollar, with which countries trade, is volatile.
  3. Since gold does not depreciate as fast as cash, it can be used as a hedge against inflation.
  4. If countries import gold from India once it makes the Sonbhadra ore usable, it will tilt the trade balance of this country with the importer in favour of India due to the high price of the yellow metal.
  5. India’s reduced need to import gold will preserve the value of the rupee as the currency of a buyer of gold gets devalued.

The metallurgists are yet to inform the government the percentage of usable gold that can be obtained from the ores that have been found.

Fauna of the region

The gold mine found in Sonbhadra is home to the world’s most poisonous snakes. Three of the world’s most poisonous snake species are found in the hills of Sonbhadra, located among the Vindhya mountain ranges. These are Russell viper, cobra and karait. According to scientists, any of the three species of snakes found in the Sone hilly region of Sonbhadra is poisonous enough to kill a human being in a few hours.

A large number of snakes are present also in the cone area of ​​Maholi Vindhamganj Chopan block of Duddhi tehsil of Dakshinchal in the Jungle police station area of the ​​Sonbhadra district.

Mausumi Dasgupta
Mausumi Dasgupta
Literary affairs writer, consultant for overseas education, history and economics enthusiast

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