According to reports, Indo Gold Ltd, an Australian firm which is currently mining for gold in India, confirmed the discovery of 38.5 million tonnes of low grade gold resources in Jagpura, in southern Rajasthan.

�Indo Gold will invest up to Rs.20 billion ($450 million) to develop a modern mine in Rajasthan. We will also invest in primary and secondary processing plants on site,� said Mike Higgins, the managing director of Indo Gold. �The deposits are world-class and we hope to start commercial production in four years,� he added. The annual Jagpura mine gold output is expected to be around 8 tonnes, according to the company.

Higgins said that the gold deposits have been discovered in an uninhabited area, requiring no relocation. �The ministry of environment has given site clearance for the project, which makes it the first foreign project to get an approval,� he commented.

The project area is held in a joint venture with an Indian private company, Metals Mining India Pvt. Ltd. (MMI). Indo Gold�s Indian subsidiary, Indo Gold Mines Pvt Ltd (IGMPL), holds 70 per cent of the joint venture, with MMI holding the balance of 30 per cent.

In 2006, India�s consumer demand for gold declined by 4 per cent to 691 tonnes compared to 721.6 tonnes in the previous year, according to the World Gold Council.