Falling commodity prices forces Rio Tinto to go slow on diamond project in MP

Rio Tinto is not in a rush to begin work a diamond mine in Madhya Pradesh, where it made a discovery in 2004, as the company’s ability to take on capex is controlled by falling global commodity prices, reports say.

The company has completed prospecting and exploration of the deposit in Chhatarpur district of Madhya Pradesh. However, it is not pushing for a quick mining lease to take advantage of the new business-friendly political regime, adds report. The company is reportedly not keen to developing the “Bunder” diamond mine ahead of its 2017 guidance.

The report further adds that falling prices of iron ore and coal—the commodities that account for the major chunk of the company’s global revenue—have put pressure on the company, necessitating stiff cost cutting and careful expansion plans in countries, including India. The company received an in-principal approval in 2012 from the state government for a mining lease after which it got its mining plan approved by the Indian Bureau of Mines.

For its environmental approval, a public hearing has been conducted and the files have been forwarded to the central government via the state. It now awaits the forest diversion papers under which compensatory land has been identified for tree plantations by the company in lieu of trees cut on the mine site and Panchayat clearances have been given for it, the report adds.