The government is mulling to revive a cluster of colonial-era gold mines - shut for 15 years but with an estimated $2.1 billion worth of deposits, says reports.

The report says that state-run Mineral Exploration Corp Ltd has started exploring the reserves at Kolar Gold Fields in Karnataka to get a better estimate of the deposits. The ministry has also appointed investment bank SBI Capital to assess the finances of the defunct state-run Bharat Gold Mines Ltd, which controls the mines, and the dues the company owes to workers and the authorities, adds a report. SBI Capital is expected to give its report by the end of this month, while Mineral Exploration Corp would complete its assessment by July, adds a report.

India, the world's biggest gold importer behind China, spends more than $30 billion a year buying gold from abroad, making the metal its second-biggest import item after crude oil. The revival of Kolar mines is expected to help the government bring down its import bill.

Initial Mineral Exploration Corp estimates show reserves worth $1.17 billion in the mines, according to the briefing document. Another $880.28 million in gold-bearing deposits is estimated left over in residual dumps from previous mining operations.

The Kolar fields, located about 65km (40 miles) northeast of the technology hub of Bengaluru, are among the world's deepest gold mines. However, in 2001, Bharat Gold was forced to cease operations due to mounting losses, the result of a large, unproductive workforce and dated, economically unviable methods of mining.