Rio Tinto eyes diamond mine in India

Rio Tinto, a leading international mining group, has lodged mining lease applications for its Bunder diamond project in the Bundelkhand region of Madhya Pradesh state in central India.

The Australian company has also announced the exploration target for diamond mineralisation at the Bunder project of 40-70 million tonnes at a grade of between 0.3 and 0.7 carats per tonne. The targeted diamond grades are at least three times greater than the grade of the Panna mine, India’s only other hard rock diamond mine.

The original discovery was made as part of a regional exploration reconnaissance in 2004. A Prospecting License was executed in September 2006, which allowed exploration activities to continue, and an order of magnitude study was commenced to evaluate the economic viability of the eight diamondiferous lamproites. The results of this are expected by the end of Q3 2008.

Nik Senapati, managing director of Rio Tinto in India, said, diamonds are a significant part of the history of India and an important product for Rio Tinto. We have spent more than Rupees 100 crore (US$25 million) over the last six years on diamond exploration and evaluation in India, and remain excited about the prospects for the Bunder project. The application for mining leases is confirmation of our commitment to both mining in India and the global diamond industry.

Bill Champion, managing director of Rio Tinto’s diamond business said they were delighted with the progress of the Bunder Project, which has the potential to be a world class operation.

Currently, Rio Tinto processes the majority of its diamonds in India and independently markets the diamond productions from its Australian, Canadian and African mines, with a well established presence in all the major diamond centres of the world.

Rio Tinto’s strategic alliance with the Indian diamond industry, built over the past 25 years, has enabled it to gain a deep understanding of India as the world’s largest diamond cutting centre and as one of the key emerging markets for diamond demand.

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