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$9 Billion Indian Diamond Mine Left By Rio May See Bid By Vedanta, Adani: Reuters


10/28/2017


$9 Billion Indian Diamond Mine Left By Rio May See Bid By Vedanta, Adani: Reuters
Earlier this year, Rio Tinto abandoned a diamond project in India following which that project is being planned to be bided for by Indian resources conglomerates Adani and Vedanta for a total value of $9 billion, reported Reuters citing information from multiple sources with knowledge of the matter.
 
According to the report, a senior state government official of the central state of Madhya Pradesh said that estimated to hold around 32 million carats of diamonds, the state government was likely to invite bids in the first week of November to explore the deposit.
 
“We’re advertising only for that area in which (Rio Tinto) have prospected and established availability of diamonds,” Manohar Lal Dubey, Madhya Pradesh’s top mineral resources official.
 
He said that around 40 days after the notice inviting bids was published, an auction would be held.
 
After saying last year that it was pulling out to conserve cash and cut costs, the Bunder deposit was “gifted” to Madhya Pradesh in February by Rio Tinto. The deposit site is about 500 km (300 miles) southeast of New Delhi and was discovered by the company in 2004.
 
With the plan to invest up to $500 million, Bunder, located in a forested area important to tiger and wildlife habitats, saw the company spend around $90 million over 14 years on it. Delays in obtaining environmental permissions has hampered the project.
 
Reports said that in recent months, the site was visited by small teams from both billionaire Gautam Adani’s Adani Group and Vedanta Resources, controlled by London-based Indian billionaire Anil Agarwal. While declining to identify the companies or share more details, Madhya Pradesh official Dubey said two company executives had met him over the project.
 
Sources reportedly further said that ahead of Rio’s exit announcement in February, an Adani executive informally approached the federal environment ministry regarding Bunder.
 
There were no comments available from the spokespeople for Vedanta, Adani Group and the Indian environment ministry.
 
Rio Tinto and its rivals, such as Anglo American, had been asked to help to explore for diamonds and gold to make India a major mineral producer by the Indian Prime Minister Narendra Modi’s government and it was at such a juncture that Rio Tinto took the decision to withdraw from the project, after legal fights with green activists.
 
Anglo American, which controls the world’s biggest diamond producer, De Beers Group, has the Volcan Investments, the family trust of Vedanta’s Agarwal, as its second biggest stakeholder.
 
In order to cut India’s dependence on imports of precious commodities, he bought the stake in Anglo, Agarwal had told the media in March.
 
“My vision is to reduce the import bill of India. We import all the diamonds, we import all the gold, and platinum,” Agarwal said. “Anglo has the technology. India doesn’t have that technology. I have made an investment to bring the technology. This will be a good bridge.”
 
An Anglo spokesman declined to comment.
 
The Madhya Pradesh government has more than halved the mining area to 364 hectares for the new round of bidding for Bunder,
 
Vineet Kumar Austin, another senior Madhya Pradesh mining official, said that eligible to bid would be firms with a minimum net worth of 25 billion rupees ($384.67 million), or 4 percent of the estimated value of the diamond reserves.
 
Commercial terms of the auction, such as royalty sharing, are yet oto be finalized by the state government.
 
(Source:www.reuters.com)