Kerala is firming up plans to fully exploit its huge gold reserves, estimated to be worth in excess of Rs.6 billion ($137 million).

The gold reserves, identified way back in 1962, are mainly centred in and around Nilambur forests in Malappuram district and at Attapadi in Palakkad district.

"Right now a feasibility study has commenced and it is being done by the Mineral Exploration Corporation of India, which has been sanctioned Rs.17.7 million for this by the central government," M.M. Nair, deputy director general of the Geological Survey of India, told reporters here Sunday.

The gold in Kerala, according to official studies, is of the highest quality with the gold content being 13.88 grams for every tonne of ore.

"Only after the feasibility report is presented will we know in detail how the mining of gold should begin in Nilambur and Attapadi," said N. Krishna Kumar, director in the Department of Mining and Geology.

"Already Karnataka-based Hutti Gold Mines has shown interest for mining at these places and we are expecting other companies from the country and abroad to put up their proposals."

Nair said once mining operations commenced, issues like protection of the environment too would come up.

"To exploit one natural resource, some changes in topography like cutting down of trees is bound to come up but the feasibility study will certainly look into these aspects. The prime concern will be sustainable development," said Nair.

Kumar said once the feasibility report was ready, the Department of Mining and Geology would give the final license for gold mining.

"The Kerala government is expected to get a royalty of 12 percent and this is an issue which could be further negotiable," said Kumar.

Indo-Asian News Service