De Beers India Ltd. and Deccan Gold Mines Ltd. (DGM) have entered into a joint venture agreement to explore diamonds and gold in each other’s areas of exploration in India, The Bangkok Post reports.
DGM Managing Director Sandeep Lakhwara told reporters the exploration data will be exchanged by both partners.
De Beers India is the Indian subsidiary of South Africa-based De Beers.
According to the agreement, DGM grants De Beers the right to explore for diamonds in all its exploration areas, the newspaper reports. In turn, De Beers grants DGM the right to explore diamonds and other minerals in its areas of operation.
“Both the partners can earn a 95% interest in their respective commodities on each other’s ground by meeting expenditure targets proportional to the size of individual permit areas,” Lakhwara reportedly said.
The partners have also agreed to form a new joint venture if the exploration activities succeed and if they decided to mine diamonds and gold or other minerals in each other’s areas of exploration, with a 5% interest in the mine, the newspaper reports.
The agreement also allows each partner to receive from the other a 1.5% gross revenue royalty from any production derived from the areas, which have been relinquished and over which the data has been supplied to the limit of $10 million.
According to De Beers’ exploration manager in India Alan Campbell, the global diamond firm seeks to offer its full range of skills and talents developed by it the world over in diamond exploration and analysis, the newspaper reports. Though there are no curbs on the marketing of gold or other minerals produced by the JV, all diamonds produced by it will be marketed only through De Beers.
DGM, however, has been offered the right of first refusal over diamond deposits.
As one of the premier gold explorers, DGM has identified several mining areas in Andhra Pradesh, and Karnataka for exploring and prospecting diamond, gold, and other minerals, besides other states across the country.