Federal and state departments have discovered traces of gold in northern Uttar Pradesh's Sonbhadra district after surveying the area for more than 10 years, Roshan Jacob, the head of the mining department in the state had said.

Jacob told Reuters that about 3,000 tonnes of gold ore had been found in two areas in the region, adding that concentration level of gold in the area was about 3 grams per tonne of ore. But India's Geological Survey of India (GSI) said on Saturday the total gold that could be extracted from the region might only be about 160 kilograms.

"GSI has not estimated such kind of vast resource of gold deposit," it said in a statement. India, the world's second-biggest gold consumer, mines between 2 to 3 tonnes of gold annually, relying on expensive imports to fulfil nearly all of its demand, which averaged 843 tonnes per year over the past 10 years.

The country's demand for gold - used extensively in jewellery, as offerings to Gods and in lavish weddings - cost India more than $31 billion on imports last year, making the metal its second-biggest import item after crude oil. India has frequently considered a plan to revive a cluster of colonial-era gold mines in southern Karnataka state but the project has failed to take off due to predictions of low output and high costs involved.

Source: Reuters