NMDC plans bid for $9 b diamond mine

NMDC plans to bid for a $9 billion diamond project in the central state of Madhya Pradesh, three sources directly involved with the plan told Reuters, competing against resources conglomerates Adani and Vedanta.

NMDC plans to shortly send a team to Bhopal for talks with state authorities, one of the sources said.

"We initially wanted the central government to directly give us the mine through nomination but it was turned down," another of the sources said, adding that the government wanted the mine to be sold via auction due to the large amount of interest.

The Bunder deposit, which is estimated to hold around 32 million carats of diamonds, was abandoned by global miner Rio Tinto earlier this year.

The state government is likely to auction the deposits later this month following planned changes to the National Mineral Policy that could enable wider participation, a senior state government official said on condition of anonymity.

The new policy is expected to lower the eligibility criteria for bidders on big projects, allowing bidders with a net worth of 2% of the value of a project's resources, down from 4% currently, according to a draft.

"By November 30, we will be issuing the notice inviting tender," Manohar Lal Dubey, Madhya Pradesh's top mineral resources official, told Reuters.

Rio spent about $90 million over 14 years on Bunder, located in a forested area important to tiger and wildlife habitats, but the project was hampered by delays in obtaining environmental permissions.

Small teams from both Vedanta Resources, controlled by London-based Indian billionaire Anil Agarwal, and fellow billionaire Gautam Adani's Adani Group visited the site in recent months, three sources told Reuters last month.

NMDC already mines diamonds in the neighbouring Majhgawan mine at Panna, Madhya Pradesh, where the company has extracted about 1 million carats of diamonds, according to information on the company's website.

For the new round of bidding for Bunder, the Madhya Pradesh government has more than halved the mining area to 364 hectares (899 acres).

Separately to the current bidding process, NMDC plans to explore the remaining 590 hectares of the mine area after seeking approval from the National Mineral Exploration Trust, the sources said.