After more than a decade of regulatory hurdles, local opposition and a recent dip in diamond prices, mining giant Rio Tinto (ASX, LON:RIO) has decided to mothball its massive Bunder diamond project in India by the end of the year. Discovered in 2004, the project was expected to generate about 30,000 jobs and produce up to 3 million carats a year. The company, which spent almost $120 million on the project located in the Indian state of Madhya Pradesh, had planned to invest an extra $500 million to develop it.
|The Bunder deposit is located in the Bundelkhand region of Madhya Pradesh, 500km south east of Delhi. Rio Tinto discovered the deposit in 2004 as part of a regional exploration reconnaissance programme which began in 2002. The order of magnitude study in October 2008 indicated that the Bunder deposit was likely to yield 37.4 million tonnes of kimberlite containing about 27.4 million carats of diamonds.|
|Additional core drilling, sampling and analysis of the results enabled the previous estimate to be revised up to 53.7 million tonnes of kimberlite with an estimated diamond content of 34.2 million carats.|
Rio Tinto has constructed a state-of-the-art sample plant to process bulk samples of ore on the project site and help further evaluate the value and grade of the Bunder deposit. This is critical to the development of a world-class diamond mine.
|The Bunder project is Rio Tinto's most advanced diamond mining project. The total investment to develop the mine is estimated at least 2,000 crore rupees (US$500 million).|
It is the first new diamond mine in India in over 40 years.
|The Bunder project includes a cluster of eight lamproite pipes hosted by flat-lying Proterozoic sedimentary rocks. Drilling and sampling has so far focussed on the Atri lamproite, two coalesced pipes with a surface area of 16.6 hectares. The pipe is exposed along its south-western margin but elsewhere is covered by up to 23 metres of colluvium.|
|The Bunder Mine Plan was prepared and submitted to the Indian Bureau of Mines and was approved in July 2013. The Mining Lease is anticipated to be granted in 2015 with production commencing after a two to three year construction period.|
The Bunder Deposit is estimated to be seven times richer than the Panna mine (also located in Madhya Pradesh), with a likely production rate at least 30 times greater. Madhya Pradesh would therefore rank, in terms of volume and value, in the top ten diamond producing regions of the world.
|August 2012 - Rio Tinto unveiled the inaugural Bunder diamond jewellry collection comprising diamonds from the sampling from the Bunder project in Madhya Pradesh.|
"The Courageous Spirit jewellry collection holds a very special place in Indian diamond history as it has been at least a century since India has mined, designed and manufactured its own diamond jewelry," said Dr Nik Senapati, Managing Director of Rio Tinto India. "The Bunder project, likely to come into commercial production in 2016, presents enormous opportunities not only for the Madhya Pradesh region, but for the broader Indian diamond industry as well, with Rio Tinto presenting a unique opportunity for India to mine, manufacture and market its own diamonds."