An Australian-Indian consortium intends to restart mining operations in Kolar gold field in Karnataka, the southern state of India.
Australian miner Citigold Corp has agreed to partner with Indian-based Essel Group to submit bids to mine Kolar gold field, reported Reuters.
The Australian company has conducted field visits to Kolar since 2006.
The decision to restart this mine was taken by the Indian government due to rising gold prices and also slow-down of the gold imports.
India is one of the leading importers of the gold metal, and according to World Gold Council, the country's demand for gold touched 654.3 tonnes in the second half of last fiscal year, thereby making it the third highest year on record.
As gold prices have gone up by 17% in the first quarter, the government is interested in monetising the gold fields. .
The mining leases, held by Bharat Gold Mines, will be sold to the highest bidder.
Citigold executive chairman Mark Lynch was quoted by Reuters as saying: "India can be a challenging place to work and partnering up with a solid local partner is key to making this happen.
"We made sure we did our homework."
Due to decline in gold prices, mining at Kolar field had been stopped in 2001. The field had generated around 25 million ounces over 150 years.
India plans to auction at least three gold mines, including Kolar. In the 1920's, Kolar field had 20,000 employees and in 1956, it was nationalised. By 1980's the mine was running in loss.
Image: Champion Reef mine shaft at Kolar gold field. Photo: courtesy of Adu65 at English Wikipedia/Wikipedia