Mp Govt Sees Little Shine In De Beers Bid

The Madhya Pradesh government has rejected world diamond giant De Beers tender for prospecting, mining and marketing diamonds in the state.

State principal secretary (mineral resources) S Laxmi Narayanan said here yesterday that the offer submitted by the South African giant was not in conformity with the conditions laid down in the offer document.

Stating that one of the pre-conditions for the tender was that the offerer should sell the diamonds in open auctions to be held in India, he said De Beers had given a conditional offer that it should be allowed to undertake the sale of diamonds outside India, through its subsidiary.

 

Laxmi Narayanan said the tender submitted by ACC Reo Tinto too had been rejected. In all, he said nine offers were received in response to the global invitations. These included six from NMDC, one each from Vishal Diamonds, De Beers and ACC Reo Tinto.

Narayanan said the NMDC and Vishal Diamonds had been shortlisted for the formation of a joint venture company with the state mining corporation to undertke survey, exploration, evaluation and subsequent exploitation and marketing of diamonds.

He said the NMDC had entered into a tie-up with the National Geo-physics Research Institute of India which is exploring the possibility of having a technical foreign collaboration for prospecting and mining of diamonds from the state.

Vishal Diamonds, a consortium of diamond merchants, is reported to have got a pathfinder in Australia for the purpose.

Laxmi Narayanan said rejection of De Beers offer had proved wrong the allegations that there were some underhand dealing and the state government was inclined to give the contract for the prospecting and mining of diamond to the De Beers.

Elaborating the reasons for the rejection of the South African companys offer, Narayanan said the De Beers controlled between 60 to 70 per cent of the world s mining of precious and semi-precious stones and the marketing was being done through CSO.

Keeping in view of its policy regarding prices of diamond and other precious stones, he said the CSO determined the price through its authorised diamond valuers.

According to Narayanan, the irony of the system is that the diamond producing countries supply its produce to the CSO which mixes it with the produce from several other countries.

Later, it was packed and sold to the producing countries at a price which is 10 per cent more than the purchase price, he added.

Stating that the system of arbitrary fixation of prices by CSO was unacceptable, he said the state government wanted to strictly follow its policy of total transparency at all levels and the diamonds produced in Madhya Pradesh should be disposed through open auction within the country.

Narayanan said that the shortlisting of NMDC and Vishal Diamonds had been done strictly in accordance with the policy to give contract to those company which could give maximum returns to the state from the exploitation of its natural resources.

The state government had floated global offers for the formation of a joint venture company to undertake survey, exploration, evaluation and subsequent exploitation and subsequent marketing of diamonds in eleven blocks located in Raipur, Bastar, Durg, Bilaspur, Rajnandgaon, Raigarh, Sarguja, Sidhi, Satna, Panna and Chhatrapur districts.

In its tender invitation, the state government had laid down several pre-qualifying conditions including that the offerer should be ready to give an undertaking to contribute and maintain the level of 11 per cent unsubscribed equity to the state mining corporation in the proposed joint venture company.

Besides, the offerer is expected to pay during mining and marketing of diamonds, a minimum amount of Rs 20 per carat of the total diamond production towards local area development charge.