Chief minister N Chandrababu Naidu inaugurated the project and also laid the foundation stone for its second phaseAndhra Pradesh is set to join India's gold-producing states as commercial gold mining began on Wednesday with the inauguration of a Rs 405-crore mining and processing project at Jonnagiri in Kurnool district.Chief minister N Chandrababu Naidu inaugurated the project and also laid the foundation stone for its second phase. The venture is being developed by Geo Mysore Services India Private Limited in partnership with Deccan Gold Mines Limited.According to an official release, the state government has allotted 1,500 acres for the project. Mining operations have begun across 600 acres under the first phase, while the remaining area will be taken up in later stages of development.The project is expected to generate employment for around 700 people and contribute to industrial growth in the state."This project opens a new chapter for Andhra Pradesh in the mining sector and is expected to contribute significantly to industrial growth and employment generation," an official release said.Production estimates indicate that the mine will yield around 400 kilograms of gold in its first year of operation. From the second year onwards, output is projected to rise to 900 kilograms annually from the second year, with plans to eventually expand production to two tonnes a year.Earlier this month, principal secretary (mines) Mukesh Kumar Meena said that the state has significant gold reserves, with estimates suggesting that Jonnagiri village alone could hold around 50 tonnes of gold. He added that four other locations in the state — Ramagiri, Javvakula, Chigurukunta and Bisnatam — have also been identified as having gold mining potential."Our estimate is that 50 tonnes of gold are available in Jonnagiri itself. So, we are confident that after a few years, we (Andhra Pradesh) will become the highest supplier of gold for the country," Meena told PTI.Speaking at a press conference, Meena said commercial gold production has already commenced at Jonnagiri. Around 1,500 acres were earmarked for gold mining in the village nearly a decade ago, he said.So far, exploration has been conducted on about 500 acres of the allotted land, leading to an estimated discovery of up to 13 tonnes of gold. Exploration of the remaining 1,000 acres is yet to begin and will be taken up in the coming years. Once the entire area is explored, officials expect the total estimated gold reserves at Jonnagiri to rise to around 50 tonnes.The state government will receive royalty revenue amounting to 4% of the value of gold extracted from the mine. Based on current estimates, Andhra Pradesh could earn nearly Rs 57 crore in royalty revenue from the production of 400 kilograms of gold. The figure is expected to increase to about Rs 144 crore once annual production reaches 900 kilograms.The Jonnagiri project is being projected as the country's largest private-sector gold mining venture. The development is also expected to strengthen Andhra Pradesh's presence in India's gold mining industry, which has long been associated with Karnataka's Kolar Gold Fields.