Smiles as gold price drops but not at Hutti

With gold prices hovering around Rs 25,000 per ten gms, the management has initiated measures to tighten the belt and cut down on cost of production. According to market reports, gold price is likely to fall to Rs 23,000 per 10 gms within a month, which is a phenomenal decline considering that the price was Rs 28,000 per 10 gms a month ago. Hutti Gold Mines Company Limited (HGML) has the unique distinction of being the only producer of primary gold in the country.

The company operates two units-Hutti Gold unit (HGU) in Raichur and Chitradurga Gold Unit (CGU) in Chitradurga district with an operating mine at Ajjanahalli (Tumakuru). The HGML produces four to five kgs of gold every day. It currently processes ore from Hutti Gold Mine and two satellite mines at Uti (opencast) and Hira-Buddinni (Exploratory underground mine).

Already the management has decided to cut expenses by cancelling or restricting benefits such as paid holidays. It has issued new guidelines on employees availing medical facilities at HGML hospital as well as hospitals outside.

“As of now the cost of production for 10 gms of gold is around Rs 22,000. If gold prices touch Rs 23,000 per 10 gms it will severely affect our profits. We have to cut the cost of production to cushion the likely fall in gold prices,” sources in the company said.

But labour unions are up in arms against the move to slash benefits.

“The government never came to our rescue when the company was in the red. Workers cooperated by waiting for their salary till the financial condition improved. We will not allow the company to take away benefits given to workers,” Mr Shekarappa, a labour leader said. Company executive director A.R. Walmiki defended the move stating it was intended to to cut wasteful expenditure and bring down cost of production.