Rio Tinto Backs Out of Indian Diamond Mine

The company says it is committed to its diamond business

Rio Tinto Diamonds will not go ahead with its planned diamond mine in India, which had been stalled by an environmental controversy and the Indian regulatory process.

In an emailed statement, Rio Tinto said it would close the project at the end of the year “as part of its ongoing efforts to drive shareholder value by conserving cash and cutting costs further.

“Rio Tinto firmly believes that the Bunder deposit is a high-quality discovery,” the statement continued. “Rio Tinto will now work with both the government of India and the government of Madhya Pradesh and is currently looking at options for a third-party investor to carry forward the development of the project.”

It added: “Rio Tinto remains committed to its diamonds business and the Indian diamond industry through its two world-class underground mines in Australia and Canada.”

Development of the Bunder project would have turned India, already a top diamond cutter, into one of the world’s top diamond producers. But while Rio Tinto claimed it would revive an economically depressed part of the country, environmentalists worried it would endanger the indigenous tiger population and aggravate the local water scarcity.

The Bunder deposit was first discovered in 2004. It is located in Bundelkhand region of Madhya Pradesh, about 300 miles southeast of Delhi.

The news was first reported by Bloomberg.

JCK News Director