Rio Tinto has exited from a diamond mine project in India amidst constant battles with tiger conservationists and tribal groups, regulatory issues and lowered diamond prices.
The miner spent nearly $120 million on the Bunder project in the Indian state of Madhya Pradesh, with a plan to invest an extra $650 million to develop it.
Bunder has diamond seams rich enough to have made India the tenth largest diamond producer in the world.
However, Rio said they will now no longer continue the development of the Bunder project, telling The Australian, “We will be seeking to close all project infrastructure by the end of year 2016.”
“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.”
The company had been in dispute with local tribes, environmentalists, and Indian authorities for 12 years over commencing mining activities, after having first discovered the deposit in 2004.
These delays led to them abandoning the project to aid its plan to $US2 billion in costs from its all its operations due to dropping commodity prices.
The project’s future has long been in doubt as it is located between two major tiger reserves. The Indian Forest Advisory Committee recently put the project on hold as the potential deforestation would have significantly impacted a key tiger corridor.
Although the committee suggested underground mining, Rio said the project required surface extraction which would have permanently impacted the landscape; around 1000ha of forest with nearly half a million trees would have been cut down for the mine.
Environmentalists have welcomed Rio’s decision.
Tiger conservationist Joseph Hoover said the mine would seriously affect the rehabilitation efforts of the local tiger population.
He said poachers had wiped out the tiger’s population in the Panna Tiger Reserve eight years ago and although the numbers have started picking up, the development of the mine would have scattered their breeding habitat and affected their survival rates.