Global mining giant Rio Tinto plans to produce up to three million carats of diamonds annually from its Bunder deposit, in Madhya Pradesh's Bundelkhand region.
This would be the first diamond discovery in India in more than four decades.
The mine is likely to yield 37 million tonnes of kimberlite, containing about 27.4 million carats of diamonds and has a life of 25 years.
When commissioned, the $500-million project, Rio Tinto's first in India, will catapult Madhya Pradesh into a select group of top-10 diamond-producing regions of the world.
The company has managed to successfully pass the initial two stages of mine development - reconnaissance and prospecting -- since it started work on the project in 2002.
For Rio Tinto, the road to starting its prime diamond-mining project in Madhya Pradesh runs through an area where monkeys and tigers roam.
The world's second-biggest mining company expects production from the Bunder (monkey in Hindi) project to begin in 2019. Environmentalists are raising concerns over threat to a tiger corridor over 100 km away.
As part of the third and final stage, the state government had last year awarded a letter of intent to the Anglo-Australian firm for mining in the area.
However, for the LoI to be converted into a formal mining lease, the company has to secure environment and forest clearances and get a mining plan approved.
"We hope to get the conditions soon and start construction activities in 2017.
"The first batch of diamonds will be produced in 2019," Rio Tinto India Managing Director Nik Senapati told Business Standard.
Bunder would also be one of the only four diamond mines globally that are likely to be operational over the next decade.
Rio Tinto's diamond-mining operations account for roughly eight per cent ($4.1 billion) of its $51-billion global earnings.
The company is among the world's biggest diamond producers through its 100 per cent control of the Argyle mine in Australia, 60 per cent of the Daivik mine in Canada and a 78 per cent interest in Zimbabwe's Morowa mine.
Output from the Bunder project, located in the Chhattarpur district, will add to these operations.
"The Bunder mine is expected to produce up to three million carats of diamonds annually.
"The deposit has been identified as seven times richer than the Panna diamond mine and with a 20 times higher production rate," Rio Tinto Diamonds India Chief Operating Officer Tarun Malkani said.
Panna is India's sole operational diamond mine. The famous Panna tiger reserve is also located close by.
The image is used for representational purpose only