Diamond firms rue AP delay

Diamond miners are unhappy over the Centre's delay in granting them prospecting licences (PLs) in Andhra Pradesh despite a recommendation from the state government.

Many multinational mining companies, including global majors De Beers and Rio Tinto, have been left in the lurch with the Centre sitting on their applications for PLs for two years now. No credible reason has been given for the delay, which is likely to result in a huge loss for the companies as the gestation in diamond mining stretches to as long as 15 years.

Mining companies conduct reconnaissance, which is the first stage in the process of discovering the economic viability of mineral deposits. This is followed by prospecting, which involves a detailed drilling of the area given under the PL to find out the exact location of the deposits and their value.

Andhra Pradesh emerged as one of the major hunting grounds for diamonds after Chhattisgarh and Orissa as it falls under the diamond zone as mapped by the Geological Survey of India (GSI). Following the New Mineral Policy in 1993, the Andhra Pradesh government had given reconnaissance permits (RPs) for 54,000 sq km to about nine companies. Of these, five are into diamond exploration.

De Beers, which controls over 60 per cent of the global diamond business, had found four diamond-bearing kimberlite (the rock containing diamonds) pipes, while Rio Tinto (formerly CRA Exploration India), the most successful private player so far with around 23 per cent global share in the diamond business, had struck 15 such kimberlite pipes.

According to the Andhra Pradesh government's Directorate of Mines, De Beers has applied for 16 PLs covering an area of 495 sq km after completing the reconnaissance besides applying for fresh RPs for 6,000 sq km in the state. Similarly, Rio Tinto has applied for nine PLs and AMIL Mining India sought five PLs. The department officials confirmed that none of these companies was issued PLs after being recommended by the state government about two years ago.