NMDC set to start diamond mining in Madhya Pradesh: report

The Madhya Pradesh government has asked NMDC to explore the Bunder deposits, a PTI report citing Neeraj Mandloi, principal secretary at the state's Mineral Resource Department, said on Friday.

The state government last month awarded a smaller portion of the deposit to Essel Mining & Industries, part of Aditya Birla Group, Mandloi said. That area was valued at about $9 billion, according to estimates by Rio Tinto and the state government.

Geological survey of the area, which has largely remained unexplored, is said to have shown the area to be rich in diamonds. The Bunder deposit is about 500 km southeast of New Delhi.

Rio Tinto, which spent about $90 million over 14 years on the Bunder project, decided to quit as it faced hurdles for mining in the area.

NMDC is said to have shown interest in exploring and mining the area.

If the Bunder deposits prove real, Madhya Pradesh, the only diamond mining region in Asia, could also be among the world’s top ten diamond producers

The company had plans to invest up to $500 million but pulled out of the project after legal battles with green activists and delays in obtaining environmental permits.

NMDC already mines in the neighbouring Majhgawan mine at Panna, Madhya Pradesh, where the company has extracted about 1 million carats of diamonds, according to the company’s website.

The state has also asked NMDC to explore and mine diamonds in several other blocks, Mandloi said.

NMDC chairman and managing director N Brijendra Kumar on Friday clarified that NMDC is not among the public sector units (PSUs) the union cabinet has approved disinvestment of stake.

Also, he said, Neelachal Ispat Nigam Ltd (NINL), one of the six PSUs that the government plans to sell stake, is a joint venture company in which four central PSUs - MMTC, NMDC, BHEL and MECON - and two Odisha government companies, IPICOL and OMC, are shareholders.