The Andhra Pradesh government is preparing to launch a fresh auction process for the Chigargunta-Bisanatham gold block in Chittoor district in the Rayalaseema region of Andhra Pradesh, a mineral-rich tract considered one of the country’s most promising gold-bearing areas for its high-grade deposits and key location within the historic Kolar Schist Belt.

On the other hand, Chief Minister Nara Chandrababu Naidu formally started operations at the Geomysore Services India Pvt. Ltd. (GMSI) plant at the Jonnagiri gold mine in Tuggali mandal of Kurnool district on Wednesday (June 24, 2026), giving a boost to investment in the gold mining sector in the State.

Spread across 273 hectares in Chigargunta and Bisanatham villages of Kuppam mandal, the block has been identified for grant of a Mining Lease (ML), according to the authorities at the Mines department of Andhra Pradesh.

Geological investigations carried out by the Mineral Exploration and Research Institute of Technology (MERIT) under the Directorate of Mines and Geology have established total geological resources of about 22.16 lakh tonnes of ore at an average gold grade of 5.64 grams a tonne (g/t).

Officials said the Chigargunta segment accounts for about 20.43 lakh tonnes of resources at an average grade of 5.73 g/t gold, while the Bisanatham block contains about 1.73 lakh tonnes at 4.70 g/t. The overall grade is significantly higher than the global benchmark generally considered viable for primary gold mining, making the block an attractive investment opportunity.

The mineral block forms part of the southern extension of the renowned Kolar Schist Belt, which hosts the historic Kolar Gold Fields (KGF) in neighbouring Karnataka. The KGF, once among the world’s deepest and most productive gold mines, were operated by Bharat Gold Mines Ltd. (BGML) for over a century before being closed by the Centre in 2001 because of declining shallow reserves and rising operational costs. Before closure, the mines had collectively produced more than 900 tonnes of gold.

Geologists note that the presence of ancient workings and earlier prospecting activities in Chigargunta and Bisanatham indicates that the gold-bearing geological formations of KGF continue into Andhra Pradesh, offering significant untapped potential for domestic gold production.

The block has witnessed multiple auction attempts. In the first round conducted in July 2018, NMDC emerged as the preferred bidder and received a Letter of Intent in October 2022. But the public-sector miner later surrendered the block, citing the high proportion of patta lands within the lease area. The State government accepted the surrender and revoked the Letter of Intent in February 2025.

A second auction was initiated in January 2026 with bids invited by February 16. A preferred bidder was declared within ten days of the bid due date, but the auction was not finalised. The government is now proposing to issue a fresh Notice Inviting Tender (NIT) for a third auction attempt shortly, to develop the important gold resource. The bidders can participate in this third round of tenders up to July 9, Mr. Mukesh Kumar Meena, Principal Secretary (Mines department), Government of Andhra Pradesh, who attended the Jonnagiri event along with the Chief Minister, told The Hindu on Wednesday.