KOTA BHARU: Pulai Mining Sdn Bhd, which operates one of the biggest gold mines in Kelantan, is moving from alluvial to hard rock mining to extract gold in its concession area in Galas, Gua Musang.
Chief executive officer Datuk Wan Mustapha Wan Ab Hamid said the company started making the change with expertise from China Railway Group Ltd since October last year.
"We are making the switch as income from alluvial mining is dipping while at the same time, operational costs is rising," he told reporters after the official opening of its branch office by Menteri Besar Datuk Ahmad Yakob here, yesterday.
Pulai Mining is a joint venture between Kelstone Sdn Bhd, a unit of the Kelantan State Economic Development Corp (PKINK), and a local private company.
Wan Mustapha said the company is currently carrying out exploration in an area of 3,700 sq hectare in Galas with an iron ore and gold mines still actively operating there.
He added the company produced 11,073 ounces of gold since operating in 2011 and paid out a tribute of RM4.4 million to PKINK, while royalty to the state government amounted to more than RM2.2 million.
Meanwhile, Wan Mustapha called on the state government to reduce the royalty rate for iron ore as the price of the commodity has dropped 36 per cent since last year while production costs have risen.
"We have presently 30,000 tonnes of iron ore in our stockpile waiting for the right time to sell. Its value previously was about RM3 million but this has reduced to about RM1 million with the drop in commodity prices," he said.
Wan Mustapha said several companies that carry out iron mining operations in the state are currently in discussions with the state government to arrive at a favourable rate.
"We have been paying about RM20,000 in royalty a month to the state government since the last few years," he said.