Rio Tinto’s decision to close its Rs 2,200 crore Bunder diamond mine in MP has not only left the mining giant’s nearly 300 local employees worried about their future but also the state government that will lose out on royalty.
The announcement from the world’s second-biggest miner, however, gave green campaigners a reason to cheer. Besides, the decision is being seen a major setback for the government ahead of the global investors’ summit in Indore in October.
Discovered in 2004, development of the mine in Chhatarpur district has been stymied by delays in environmental approvals that would allow the clearing of a forested area important to tiger and other wildlife habitats.
On August 19, Rio Tinto Group said it would shut the diamond mine by the end of the year to cut costs and conserve cash. It said it would work with Indian authorities to find options for another investor to take over the project.
The local employees have been conveyed that they would no longer be able to continue their jobs with the company. They are awaiting compensation, which is being provided by the company. Rio Tinto said it would offer a fair and equitable Voluntary Severance Scheme to contractors employed at the project site.
A Rio Tinto employee, who has been working since 2007, said: “Even though company has promised good compensation to us, we are sad that 285 of us have become unemployed and there will no regular income in the coming days.”
“We had so many hopes from this project. We thought it will change our life forever. But all our hopes have been trampled upon. At least the company is providing us some good compensation. But we are worried over our uncertain future.”
The state government was upbeat over the diamond reserves that would have churned out diamonds at a grade of 0.7 carat per tonne and added good revenues to the state coffers.
Director geology and mining VK Austin told HT that had Rio Tinto gone ahead with the project, the state government would have got 11.5% royalty on the sale of the diamonds. “It is definitely a loss to the state exchequer, but I don’t have exact idea why Rio Tinto decided to close it project.”
Villagers and green campaigners, who had campaigned against the project for a long time, are jubilant and organising a function in September first week to celebrate.
“We are happy that our fight to save our environment has finally borne some fruit. We are happy with the decision of Rio Tinto. All those people, agencies, NGOs, who campaigned against the project on environmental grounds, will come to Buxwaha. We will celebrate and expressed gratitude to all the participants,” said Brijesh Bilthare, who was at the forefront of the campaign against the project.
Rio Tinto was granted prospecting license in 2006, after the Bunder pipes were discovered in 2004. In July, HT had reported that the government shelved granting permission to mining corporation Rio Tinto to open a diamond mine in MP, saying the plan endangers a rich forest area and a tiger corridor between the Panna Tiger Reserve and Nauradehi Wildlife Sanctuary.