Rio Tinto Gives Away Shelved Mining Project

Rio Tinto is walking away from the diamond mining project it started in India 13 years ago, the Bunder project.

London-- Rio Tinto has given its Bunder diamond project in Madhya Pradesh, India to the government there after walking away from the potential mine site to cut costs.

The project was discovered in 2004 and Rio Tinto signed an endorsement of mutual commitment with the government of Madhya Pradesh, a state in central India, to develop the project in 2010.

The ore body originally was estimated at 37 million tons containing 27.4 million carats of diamonds.

Rio Tinto said it would cost at least $500 million to fully develop Bunder but expected that once developed, the deposit would make India--the country that produced diamonds like the Wittelsbach-Graff and the Hope and once was home to the famed Golconda mines--one of the world’s top diamond producing nations again.

The company even introduced a “jewelry collection”--a necklace and a pair of matching earrings--set with rough and polished diamonds from Bunder in August 2012.

But environmental approvals needed for construction of the mine--which required the clearing of a forested area important to wildlife--never came through, and Rio Tinto announced in August 2016 that it would shut down the site by year’s end as part of a company-wide effort to cut costs, Bloomberg reported.

Last month, the government in Madhya Pradesh signed an order accepting ownership and taking responsibility for the Bunder assets, meaning the land, plant, equipment and vehicles at the project site as well as any diamond samples recovered during exploration.

This approach will help the government to package the assets if it decides to proceed with an auction for the mineral rights at Bunder, Rio Tinto said.

Rio Tinto still has diamond operations in Australia, the Argyle, and in Canada with the Diavik diamond mine.