Fura Gems eyes Rio Tinto’s MP diamond licence

Canada-based Fura Gems Inc is interested in acquiring the Bunder project in Madhya Pradesh a year after global miner Rio Tinto surrendered its licence to explore the mine to the state government.

A 2017 start-up, Fura Gems operates a ruby mine in Mozambique and an emerald mine in Colombia.

Listed on the Toronto Stock Exchange, Fura Gems, a group company of Forbes and Manhattan, has submitted its intent to the state government.

Rio Tinto had invested huge sums in the past 10 years in exploration and had mined sample pieces of diamond in it. But before the beginning of commercial production, it exited by surrendering the licence at no cost. The company had paid ~6.4 million to the state government as royalty.

“We have submitted our intent to the state government and are waiting for the government to auction the mine,” said Dev Shetty, president and CEO, Fura Gems Inc.

The project is the only operational diamond mine in India and exploration there has been estimated to be viable. The mine has around 35 million tonnes of diamond ore, of which an estimated 1.9 million tonnes will be mined annually for the next 20 years.

“Rio Tinto has done significant exploration. We are expecting commercial operations to begin in two years,” said Shetty.

Sources said Rio Tinto was facing government pressure to conduct auctions of rough diamond in India. But the company wanted to do it outside the country. The company’s position was that diamond output would return to India.

Eleven out of every 13 rough diamond pieces are processed in India. Fura Gems is planning to invest $15-25 million in the next two years, in addition to the cost of acquisition. For this, the company is in talks with an Indian joint venture partner.