Given the magnitude of raw material required, would India ever become self-sufficient with regards to its rough diamonds requirement, if diamonds were mined within the country? Never, and the thought would be preposterous, as the cutting and polishing sector in the country seems to be growing by the day. It would be inevitable for the country to import/buy rough diamonds from multiple producers. But, producing diamonds from local mines will definitely ease the shortage situation as well as give some solace to rough buyers in terms of price, which is currently eating into their profits.
Earlier this year, it came as a surprise to many when Rio Tinto withdrew from the Bunder project, as it was widely believed that the company was close to getting a forest clearance for the diamond mine from the Indian Environment Ministry. When Rio Tinto pulled out of the project in August 2016, presumably to conserve cash and cut costs, more than $ 500 million had already been spent on the project. But, most importantly, India's dream of being able to have source 'rough' from within the country and its perpetual shortage of rough eased to an extent, was dashed to the ground, literally.
Some media reports also hinted that Rio Tinto decided to pull out of the Bunder project because the Indian government, in a bid to make India a major mineral producer, was seeking Anglo American (a rival of Rio Tinto) to explore for diamonds and gold in India. While it is futile now to look for the reason as the project is stalled, it would be worthwhile for the government to make sure that the Bunder deposits are tapped in the future, as it is the best deposit in the country.
In June this year, the Supreme Court of India ordered the only diamond mine in production today - the government-owned National Mineral Development Corporation’s (NMDC) Panna Mines - to be closed for environmental reasons. NMDC still insists that there are a lot of diamond deposits to be mined. For a country, which boasted of being the only supplier of diamonds thousands of years ago, this seems to be an unbelievable situation. India could well be called the first diamond miner in the world; and the world’s only supplier until the 18th century.
History has it that for centuries India was the only place where diamonds were found. And the world became aware of what a diamond was only when Alexander the Great came to India and carried away the loot. It was then that the marvel stone was introduced to the world. But one wonders about what happened to all those great diamond mines of India. Are they still good enough to be tapped, because diamonds under the ground is useless for the humans in general, but could be beneficial if they are mined and used instead.
Some of the most famous diamonds in the world, with a story attached to each stone, all came from India. For instance, the 105-carat Koh-i-Noor, now in the crown of Queen of England; the 410-carat Regent Diamond which was discovered by a slave; the Hope Diamond, Idol’s Eye, Dresden Green, Briolette of India, the Florentine, the Princie, the Nur-ul-Ain and many more, were all mined from Kollur, Chennur, Kurnool and Panna mines.
Commenting on the mining activities in India, Sanjay Kothari, Vice Chairman, KGK Group said, "The diamond mining industry has never flourished in India in the past due to various reasons and with not much change in the situations, it is still either being stalled or not able to find enthusiastic investors to take up the projects. The high environmental and legal issues that surround this subject often lead to heavy losses for the investor, in this capital-intensive industry, if stopped half way. Various NGOs mushroom around the project and create problems and long delays. Even the technology that is being used in mining diamonds in Canada, Australia, Russia and Africa is far more superior than what we have in India. It is not due to doubts whether the lands of India do have high quality minerals hidden underneath or not, but due to these fears no investor is willing to take the risk. And, the situation is true for types of mining like copper, gold, etc., and not just diamonds."
So, it is true that there is still huge potential for diamond mining in India. It is not surprising that when the Indian government opened up mining to the private sector in 1995, there was an immense interest among global companies to mine diamonds in India. But, most of them were wound up due to the slow progress in securing approvals from the government organizations. Interested companies had to start with a Reconnaissance Permit, followed by a Prospecting Licence and then a Mining Lease, in that order, which took years, forcing the global companies to give up on the projects.
In 2004, Rio Tinto discovered eight diamondiferous pipes near Bunder, in the Indian State of Madhya Pradesh. But problems arose when it was noticed that the 1,000 hectares of the area was between the Panna Tiger Reserve and the Navardeli Wildlife Sanctuary - an environmentally-sensitive zone. Apparently, there are 34 million carats of diamond deposits there, but the project is stalled by environmentalists as it would mean cutting down thousands of trees and harming the habitat of animals and birds, including tigers.
India’s Mines Secretary Balvinder Kumar said on 30th August, 2016 that the Bunder diamond mine would be allocated to a state firm or auctioned soon. Now, the Indian diamond industry waits and hopes that some sort of solution is arrived at; and the diamond-rich deposits are tapped for the benefit of the Indian diamond industry in particular and the country on the whole.
Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished
