The Bunder diamond project in the Chhatarpur district of Madhya Pradesh in India, initially developed by global mining giant Rio Tinto, which later withdrew from the project and handed it back to the authorities, will be put up for auction, according to a decision taken by the state government at a cabinet meeting this week.

The mining department of the state government will begin the process of obtaining all necessary permissions for conducting the auction. No time frame seems to have been decided as yet.

Media reports state that the government will be auctioning 364 hectares of land that is estimated to have mineral reserves of 34-37 million tonnes with an inferred yield of about 27 million carats. The reports add that the government estimates place the storage value at Rs 60,000 crore.

According to reports, the cabinet has decided that the new owner would have to ensure that the rough diamonds are auctioned within the state, after which they may be exported to any other place for subsequent processing and trade.

Rio Tinto had commenced exploration in 2004, and in 2011 had entered into an agreement to develop the diamond mine, which was expected to go on stream in 2019. However, in 2016, as part of a global decision to drive shareholder value by conserving cash and cutting costs, Rio Tinto decided “not to proceed with the further development of the Bunder project”. At that time, it was reported that the company had invested a substantial portion of the total estimated project cost of Rs 2,200 crore.

Pic caption: The Bunder mine lies in the state of Madhya Pradesh in central India