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Rio Tinto may have failed to get a foothold in its core business of iron ore mining in India, but this has not dampened its spirits. Rio Tinto may have failed to get a foothold in its core

business of iron ore mining in India, but this has not dampened its spirits. The Australian company, which has a lease to mine diamonds in the Bunder region of Madhya Pradesh, said on Friday

that it will invest as much as Rs2,200 crore on exploration and production of diamonds from the mines. Full-scale commercial production is expected to start by 2016, said Bruce Cox,

managing director, Rio Tinto Diamonds. According to him, the company is currently working on a mine plan, environment and forest approvals and forest diversion required to execute a mining

lease. This process will complete in three years. The company will embark on construction in 2014 and 2015 and start commercial production by 2016. “We will ramp up the capacity within a

year and use our robust network in the country to market the product,” said Cox. According to Cox, global diamond consumption has been growing briskly, led by China and India. Diamond prices

are ruling at 20% higher than in the pre-crisis (2008) period and appear set to go higher, given that there has been no major diamond discovery in the last decade and the supply situation

could remain tight. The Bunder mine was discovered by Rio Tinto in 2004. The company signed an agreement with the state government sealing mutual commitment to development of the project in

2010. The state government gave an in-principle nod in January 2012 for the project mining lease. A company note pegged the inferred resource at Bunder at 37 million tonne, containing 27.4

million carats. The deposits are said to be seven times richer and have a production rate 20 times higher than state-owned NMDC’s Panna diamond mine. Once developed, the project is expected

to catapult Madhya Pradesh to the top ten diamond producing regions of the world. The project employs over 400 people at the moment, which could touch 10,000, directly and indirectly and

once operational will put Madhya Pradesh in the top ten diamond producing regions of the world, said Cox. The company is currently showcasing the inaugural Bunder diamond jewellery

collection, mined during a sampling exercise at the site, at the India International Jewellery Week in Mumbai. Madhya Pradesh chief minister Shivraj Singh Chouhan, who attended the inaugural

function, said his government is keen to develop the state as a diamond cutting and polishing hub. He promised faster clearances and infrastructural facilities to facilitate this.