Rio Tinto bets on India to revive its ailing diamond business
Mining giant Rio Tinto (LSE:/NYSE:/ASX:RIO) has decided to target the Indian marriage gifting market with its “Nazrana” brand of gem-based jewellery in an effort to boost its ailing division, reports Economic Times.
According to the paper, India, China and the US are the three main countries the diversified miner is targeting first, through deals with local retailers.
In August this year, the Anglo-Australian miner announced it would invest $396 million in developing a diamond mine in Bunder, in the central state of Madhya Pradesh.
India’s thriving diamonds and jewellery industry meets its requirement for rough precious rocks mostly through imports coming mainly from Africa and Russia. A local source of diamond could help the country reduce its dependence on foreign suppliers.
While the huge mining conglomerate is better known for supplying more prosaic mineral resources, Rio Tinto currently has full or majority stakes in four diamond mines around the world, including the Argyle mine in Australia, the Diavik mine in Canada, the Murowa mine in Zimbabwe and the Bunder project in India.
Rio Tinto first discovered the Bunder diamond project in 2004, with the company subsequently signing a State Support Agreement with the Government of Madhya Pradesh in 2010.
Rio Tinto expects the Bunder diamond mine to commence commercial production in 2016 and eventually make Madhya Pradesh one of the world's top ten diamond producing regions.
The world of diamond mining is undergoing fundamental changes.
In early September a bullish plan to revitalize Nunavut’s Jericho diamond mine, which last functioned from 2006 to 2008, was put on hold as Canadian-based Shear Diamonds (CVE:SRM) decided to halt production at the site, only months after it restarted operations.
BHP, the globe's biggest mining company, launched a review of its diamond operations late last year with an eye to sell most or all of its assets. BHP has already off-loaded its Chidliak exploration project in Canada to Peregrine Diamonds.
Rio Tinto followed in March saying that it was reviewing its gem business, potentially selling it all off. So far, no signs of the later has been shown.