Rio Tinto, the world's third-largest mining company will invest around $500 million (Rs 2,763 crore) in developing the Bunder diamond mine in Madhya Pradesh, a top company official said on Friday.
However, this surprise investment announcement comes less than 5 months after the London-based miner announced that it would exit the diamond business. (See: Rio Tinto to exit diamond business)
Talking to reporters in Mumbai after showcasing some sample jewellery comprising diamonds from the Bunder mine prior to commencing construction, Rio Tinto Diamonds managing director Bruce Cox said that the company will be investing around $500 million in developing the mine, with commercial production likely to start from 2016.
The Anglo-Australian miner, which mined 11.7 million carats of diamonds last year, had in March said that it would review its diamond business and would consider divesting its diamond mines in Australia, Canada, India and Africa, in order to focus on expanding in more profitable commodities such as iron ore, copper and uranium.
Harry Kenyon-Slaney, chief executive of Rio Tinto's Diamonds & Minerals, had then said, "We regularly review our businesses to ensure they remain aligned with Rio Tinto's strategy of operating large, long-life, expandable assets.''
The value of Rio Tinto's diamonds assets on its books is $1.2 billion, but analysts say that with its flagship Argyle diamond mine in Australia, the assets could fetch around $2 billion.