De Beers plans $300 m investment via new JV

De Beers of London is planning to invest between $200 and $300 million over the next few years in diamond mining in India through a new joint venture with Hindustan Diamond Company Pvt Ltd (HDC).

The investment would be made by De Beers Centenary Mauritius Ltd, which already has a 50 per cent stake in Hindustan Diamond Company Pvt Ltd.

Chairman and managing director of HDC V Madhavan Nair said, "We are planning a new joint venture with De Beers. The memorandum of understanding is likely to be signed by the month-end and the JV will be operationalised in 2-3 months."

The new venture with have a total equity of Rs 100 crore and would be registered in Mumbai. De Beers would have a majority 74 per cent equity participation in the new JV with the remaining 26 per cent by HDC.

Sources said De Beers was already surveying areas in Karnataka, Andhra Pradesh, Madhya Pradesh, Chattisgarh and Tamil Nadu for potential diamond mines.

The prospects for possible mines appear bright, a source close to the development said. India has only one operational diamond mines at Panna in Madhya Pradesh, which is owned by the National Mineral Development Corporation.

HDC, the existing joint venture between De Beers and the government wherein both sides hold 50 per cent stake, is the largest supplier of rough diamonds to small and medium manufacturers and exporters of polished diamonds in India with a turnover of Rs 1,028 crore in 2003-04.

The company has also paid a dividend of Rs 98 lakh to the government for 2003-04.

The company was promoted in 1978 to provide rough diamonds particularly to small and medium exporters from Diamond Trading Company (DTC) of London, the marketing arm of De Beers. The company also purchases rough diamonds from Antwerp and Tel Aviv.