Mining giant Rio Tinto (ASX, LON:RIO) said Tuesday it’s handing its shelved and massive Bunder diamond deposit in India to the state government of Madhya Pradesh, where the mine is located.
The company, which spent almost $120 million on the asset discovered in 2004, had planned to invest an extra $500 million to develop it. But Rio decided last year to mothball it due to regulatory hurdles, local opposition and weak diamond prices.
The Madhya Pradesh government will take ownership of the assets, including all the land, plant, equipment, and diamond samples recovered during exploration, Rio said in the statement.
The move is aimed at helping the state government package the assets in case there are future plans to auction the mineral rights, the company noted.
According to Rio Tinto, Bunder (monkey in Hindi) remains a top-class diamond deposit as it has the capacity to generate about 30,000 jobs and produce up to 3 million carats a year.
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