Rio Tinto working on MP diamond mine plan for $500 mn

The project, when executed, is expected to bring Madhya Pradesh in the world's top ten diamond producing regions

Global mining giant Rio Tinto is working on the mine plan and necessary regulatory clearances for its $500 million diamond project in India which, when executed, is expected to bring Madhya Pradesh in the top ten diamond producing regions in the world.

"Rio Tinto is now working on the mine plan, environmental and forestry approvals required to execute a mining lease. At least $500 million will be required to fully develop the Bunder diamond project," a company official told PTI.

The mining giant had signed a state support agreement with Madhya Pradesh government for the project in 2010.

The Madhya Pradesh government in January 2012 gave its in-principle approval to the issue of a mining lease for the Bunder project via a 'Letter of Intent' in January 2012.

"Once developed, the Bunder diamond mine is expected to place Madhya Pradesh in the top ten diamond producing regions of the world," the official said.

As per the initial estimates of the ore body, it has ore reserves to the tune of 37 million tonnes containing 27.4 million carats.

Rio Tinto CEO Sam Walsh last week had said, "We have the potential for ...Half a billion dollar investment in Madhya Pradesh in diamonds."

The company, however, has not been able to kickstart it as it is yet to get the environment clearance.

Walsh has said he had talks with Prime Minister Narendra Modi on the planned $500 million investment in Bunder diamond mine in Madhya Pradesh.

"We are waiting for approvals, forestry and environment approvals, which I am hopeful will come through in the near term. Prime Minister and I have met three times during the past six months," he has said.

He has said the diamond project is "very important downstream because it will provide 30,000 jobs in diamond cutting."

In Bunder, Rio Tinto has discovered a cluster of eight diamondiferous pipes.