NEW DELHI (AP) — The Rio Tinto group has decided to hand over a diamond mine to the central Indian state of Madhya Pradesh where the project is located, the company said Tuesday.
Work at the mining giant's Bunder diamond mine stopped last year when the company announced that it would end the project to cut costs and conserve cash.
Development of the mine would have cost the company around $330 million.
Handing over the mine and equipment to the Madhya Pradesh government will help the state package the assets if it decides to auction the mineral rights, Rio Tinto said in a statement.
"Our exit from Bunder is the latest example of Rio Tinto streamlining its asset portfolio. It simplifies our business, allowing us to focus on our world-class assets," Arnaud Soirat, Rio Tinto Copper & Diamonds chief executive, said in the statement.
"Rio Tinto has long and enduring ties with India and we continue to see the nation as an important market for our metals and minerals and as a key hub for Rio Tinto's business services," he said.
The company said the Madhya Pradesh government signed an order in January accepting ownership of the mine and taking responsibility for its assets.
Australia-based Rio Tinto discovered the diamond deposits in 2004 and signed an agreement to develop the mine in 2010.
Rio Tinto has strong ties with the Indian diamond industry. It says it employs more than 250,000 Indian diamond cutters and polishers for processing its diamonds.