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Birla Group Beats Adani, Wins Bid for Country’s Biggest Diamond Mine

Five companies had shown interest in Madhya Pradesh’s Bunder diamond mine worth Rs 55,000 crore, but, only Adani and Birla had managed to enter the last lap of online bidding process.
Birla Group Beats Adani, Wins Bid for Country’s Biggest Diamond Mine

Image Courtesy: DB Post

Bhopal: Aditya Birla Group’s firm, Essel Mining, has won the bid for the country’s biggest diamond exploration and mining unit worth Rs 55, 000 crore, ‘Bunder Mines’ in Chhatarpur district of Madhya Pradesh, defeating the Adani Group in the last lap.

Five companies, Essel Mining of the Birla Group, Chendipada Kolari of Adani Group, Vedanta Group, National Mining Development Corporation and Rungta Mines Limited had participated in the bidding for the Bunder diamond mine. The mine was initially developed by Anglo-Australian multinational mining company, Rio Tinto, which had stopped the mining project. Following this, bids were invited for selling the mine.

The base royalty was initially fixed at 11.5% of the offset price by the state government, but itshot up to 30.5% to the end. The latest amount that the state government is due to get 41.55% of the royalty from the mine, which will amount to Rs 23,000 crore out of total Rs 55,000 crore.

The former state government led by the Bharatiya Janata Party had handed over the mine to Rio Tinto, which ran the mine from 2007 to 2010. In 2010, the multinational company left the mining after a rift with the state government. Subsequently, the mine was shut. Then in 2018, the Congress government was elected to power, following which they began the process for auctioning the mine to earn revenue.

Also read: Diamond Mining in Panna: Illegal Excavations and Inconspicuous Auctions

The Bunder diamond mine in Buxwaha region of Chhatarpur has estimated reserves of around 34.30 million carats of diamond. The project involves a 50-year mining lease for 374 hectares of forest land for which the government has already earmarked land for compensatory afforestation, according to the mines ministry. This is the single largest allocation of natural resource in the country under the new auction regime, after coal.

Chhatarpur’s Bunder will be the second diamond mine in India after Panna’s Majhgawan Diamond mine, managed by National Mineral Development Corporation (NMDC) for last five decades.

Birla group which has already promised to open 100 hi-tech cowsheds in the state during the recently concluded investor summit has close relations with Chief Minister Kamal Nath. The bonhomie between the two were widely noticed during the summit held in Indore. After the auction, the State Department of Mining Resources has issued an invitation letter to Essel Mining requesting to deposit 10% of the performance guarantee which amounts to Rs 27 crore. The Letter of Intent (LoI) will only be issued after this.

“Bidding for the mine was completed on Tuesday evening and Birla group (Essel Mining) won the bid after 11 hours of marathon online bidding process. The base royalty was fixed at 11.50% while the auction premium was finally closed at 30.50%. The state government will get a total 41.55% of sale price of all the diamonds from the mine,” state mining minister, Pradeep Jaiswal, told media persons.

Also read: No Development, No Employment: Panna Tiger Reserve Is a Curse, Residents Claim

He said Chhatarpur’s hitherto unusable mine will not only generate employment for the youth of Bundelkhand and other regions but also generate huge revenue. "We have received five times more revenue and after two years, the government will get Rs 1200 to 1500 crore as revenue. This is a result of the new mining policy framed by chief minister Kamal Nath,” Jaiswal added.

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