Rio Tinto to spend at least $500 million to advance diamond project in India

Rio Tinto to spend at least $500 million to advance diamond project in India

Bunder diamond jewellery collection.  (Image courtesy of Rio Tinto Diamonds)

Mining giant Rio Tinto (LON:RIO) plans to invest $500 million in its Bunder diamond mining project in the central Indian state of Madhya Pradesh, the firm boss Sam Walsh said Monday.

Speaking to reporters Walsh added the company is awaiting environmental clearances from Indian authorities to start mining, but didn’t say how soon he expected to receive such permits, Reuters reports.

Rio found the massive deposit in rural India, the most important diamond discovery in the country in the last 40 years, back in 2004. But it wasn’t until 2012 that it got an initial approval to develop the mining project, which is now just waiting for environment and forests clearances.

Rio Tinto Diamonds managing director Jean-Marc Lieberherr said last month the firm wanted to be the main player in the industry in India, driving the sector's growth in years to come.

The touted project is expected to generate about 30,000 jobs and produce up to three million carats a yearRio has said.

Here come the critics

However environmentalists have been rising concerns over potential threats to a tiger corridor about 100 km from the deposit that could reposition India as a top diamond producer. The world-class mine would also make of Madhya Pradesh on the globe’s top 10 diamond producing regions in terms of value and volume.

Once operational, Bunder (monkey in Hindi) will be one of only four new diamond mines globally likely to become operational within the next decade.

Indian diamonds are known for their quality, particularly those from the ancient Golconda mines, which has produced extremely clear gems. One of them is the historic Archduke Joseph diamond, one of the world's most famous and rarest from Europe's aristocracy, which set a world record for colourless gems in 2012 after it sold for $21.5 million at a at Christie’s Geneva Magnificent Jewels auction.