India’s NMDC joins the race for $9bn diamond project
India’s state-owned NMDC, the country’s largest iron ore producer and exporter, is about to be one of the latest big names in the local mining sector to bid for the massive Bunder diamond project, from which Rio Tinto (ASX, LON:RIO) exited early this year.
Sources familiar with the matter told Reuters the company was readying a bid for the $9 billion asset in Madhya Pradesh, which will place it as a formal competitor to Indian conglomerates Adani and Vedanta.
When and if operational, Bunder would be one of only four diamond mines likely to go into production over the next decade.
NMDC already has a diamond mine — Majhgawan — located mine in the same state, which now owns Bunder.
According to former owner Rio Tinto, Bunder (monkey in Hindi) is a top-class deposit that has the capacity to produce up to 3 million carats a year, generating about 30,000 jobs.
The company, which spent almost $120 million on the asset discovered in 2004, had planned to invest an extra $500 million to develop it. But last year Rio decided to mothball it due to regulatory hurdles, local opposition and weak diamond prices.
When and if operational, Bunder would be one of only four diamond mines likely to go into production over the next decade.
Indian diamonds are known for their quality, particularly those from the ancient Golconda mines, famous for producing a rare kind of extremely clear gems. One of them is the historic Archduke Joseph diamond, one of the world’s most famous and rarest gems from Europe’s aristocracy, which sold for $21 million in Nov. 2012.
The South Asian nation was the only diamond producing area in the world during the 18th century, when Brazil began developing a few mines. The trend was followed by South Africa in 1867 and then Australia, Russia and Canada.
Diamonds recovered at Bunder. (Image courtesy of Rio Tinto.)
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2 Comments
Altaf
The current ruling party came to power on the promise of doing away with the earlier policy paralysis. In the last three years, not a single mega project was started. Posco 10MT steel plant, Mittals 12 MT steel plants, Vedantas Aluminum Smelter were some of the famous projects quoted globally in reference of policy paralysis. This current ruling party did not fare any better. Except for few Re-auctionings of the same old mines, 2G, 3G addressing some bottlenecks nothing worth mentioning was done.
This diamond mine is doing rounds recently. It was clever of Rio to get out with minimal expenditure. Indian PSUs and Indian bureaucracy are made for each other.
We are sleeping on a 3 million carat output per anum priced anywhere between 2.5 to 5 billion dollars cash per anum. With so much local supply, the potential for jewelry exports is mind boggling.
Much smaller nations like Lesotho are very organized in Diamond mining and transparent while we are still trying to make a start. Already India lost touch with Diamond prospecting when they stopped Golconda mines. We dont even know exactly where the historical mines are. A simple two generation gap is sufficient to kill a skill attained over thousands of years. Now we need to start learning from Foreign nations of how a raw diamond looks like and how to prospect for them and how to value them and all.
Manoj Dosi
Well said Altaf , very true of Indian Mining scenerio … No foreign investor dares come to India due to its beaurocratic hurdles , issue of land acquisition etc.. World gaints like Arcelor Mittal , POSCOE have been in India fo lst more than 10 years without any headway …too musch politics , local population … they do not have any inkling of what the nation has lost …. hope less , most depressing state of affairs .