The Mines Ministry today said the government will soon grant licence to global mining giant Rio Tinto to mine diamonds in Madhya Pradesh's Bunder region.
Rio Tinto has plans to invest Rs 2,200 crore on a diamond mining project in the state for which it was granted prospecting licence in 2006.
"We are examining a proposal by Madhya Pradesh government to grant mining licence to Rio Tinto at Bunder. We will grant the licence to the company as quickly as possible subject to fulfilment of procedures and regulations under the Mines and Mineral Regulation and Development (MMDRA) Act," Mines Secretary S Vijay Kumar told PTI.
"The company has already been granted reconnaissance and prospecting licences and has spent money on the project. We are bound to give nod to it under section 11 of the MMDR Act if it complies all the provided norms," Kumar said.
The Act provides that where a reconnaissance permit or prospecting licence has been granted, "the permit holder or the licensee shall have a preferential right for obtaining a ... Mining lease."
Diversified, British-Australian, multinational mining and resources group is the third largest producer of mined diamonds globally and is seeking final approval to its about Rs 2,200 crore project in Madhya Pradesh.
After getting the mining licence, the company will have to take Ministry of Forest and Environment nod to go ahead with the project.
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Madhya Pradesh government has already offered mining lease to the company on 475 hectares of land for the project, which is close to the Panna Mines of the domestic miner National Mineral Development Corporation (NMDC).
Last month, a Madhya Pradesh government official had said that the company had so far invested about Rs 250 crore on the project.
The Bunder region in Chhattarpur district of Madhya Pradesh has estimated reserves of 37 million tonnes and at 0.7 carat per tonne, the project would churn out 27.4 million carats of diamonds.
The company is said to be conducting detailed studies including geological and metallurgical to determine the best development option for the project. Rio Tinto, however, did not respond to the queries sent in this regard.
The company has applied for the Bunder project in June 2008. The Bunder pipes were discovered in 2004 as part of a reconnaissance exploration programme and a prospective mining licence was granted to the company in September 2006.