Multinationals all set to enter diamond mining in MP

State has an estimated reserve of 1.001 million carats

Diamond mining in Madhya Pradesh is likely to gain momentum with the entry of multinationals.

ACC Rio Tinto of Australia, De Beers of South Africa, BHP Minerals of Canada and the National Mineral Development Corporation (NMDC) are set to start survey and exploration of diamond mines in the Panna, Chhattarpur, Tikamgarh, Sagar, Angor and Majhgawan areas of the state.

ACC Rio Tinto has been issued four reconnaissance permits for 10,000 sq km area in the Panna Damoh and Chhatarpur districts.

"De Beers has been issued order of concurrence, and the reconnaissance permit is likely to be issued soon for survey of kimberlite pipes (a rock that sources diamond) in the Rewa district," RK Sharma, director, Geography and Mines, told Business Standard.

De Beers would be issued reconnaissance permits for gold, copper, lead, bismuth, cadmium and associated minerals, he said.

Sharma said BHP Minerals had been issued two reconnaissance permits for diamond and other minerals in the Chhatarpur and Tikamgarh, Narsinghpur, Hoshangabad and Chhindwara districts. The NMDC has been issued one reconnaissance permit for diamond in the Panna and Satna district.

But for De Beers, these multinationals were issued reconnaissance permit in 2002-2003.

The state has an estimated diamond reserve of 1.001 million carats. In 1997-98, 30,944 carats of diamond worth Rs 20.95 crore was produced at the rate of Rs 6,770 a carat. The production increased to 34,580 carats in 1998-99 worth Rs 21.65 crore at the rate of Rs 6,261 a carat.

In 2000-01, diamond output went up to 56,955 carats worth Rs 27.68 crore at the rate of Rs 4,860 a carat.

According to sources, the government is planning to set up a diamond park in the Panna region.

According to the mining plan, the multinationals will relinquish 50 per cent of the survey area after 2004-05. After 2005-06, they will be allowed to retain only 25 per cent of the area allotted to them and will have to apply for "prospecting licences".

The entry of multinationals would enhance diamond production as they would bring in the latest rock exploration and survey techniques, Sharma said.

According to industry sources, illegal mining accounts for over 4,000 carat of diamonds, mostly from shallow mines spread over 50-90 sq kms. Around 100,000 people work in these shallow mines.

Hunting fortune

• ACC Rio Tinto has been issued 4 reconnaissance permits for 10,000 sq km area in the Panna Damoh and Chhatarpur districts
• De Beers has been issued order of concurrence, and the reconnaissance permit is likely to be issued soon for survey of kimberlite pipes in the Rewa district