Madhya Pradesh: Illegal diamond mine output not reaching Panna office

In Panna, Madhya Pradesh, illegal diamond mining activities remain rampant, with diamonds bypassing the official diamond office. Authorities observed a pattern where new mines are quickly established near locations where large diamonds, like a 32-carat gem, are discovered. Two inspectors oversee a vast 20-kilometre stretch in southwest Panna, but effectively monitoring the region is challenging.

Mining involves removing tonnes of soil and stones, which are washed in stages to separate diamonds from debris. Despite this labour-intensive process, many diamonds never reach the official diamond office. Instead, they’re sold off-site to brokers who pay in cash, sidestepping legal channels and avoiding royalties.

According to the Dainak Bhaskar report, at the Panna Diamond Office, diamonds submitted by miners go through a transparent process. An 11.5% royalty and 1% TDS are deducted, and the remaining auction proceeds go to the depositor. To encourage miners to use official channels, the office offers an advance payment of ₹50,000 to ₹1 lakh for each deposited diamond. However, this incentive hasn’t entirely curbed illegal trading. Reports suggest brokers and traders visit mining sites to buy diamonds directly from miners.

In Banihan village, Umesh Pal, a farmer with 21 acres of agricultural land, has allowed over 50 individuals to establish mines on his property. He takes 30% of the proceeds from any diamond discovered. To avoid legal complications, he provides miners with photocopies of diamond mine leases. Recently, Umesh charged ₹5 lakh to set up a mine at a spot where a 32-carat diamond was unearthed.

Similarly, contractor Vikram, who has been mining in Sarkoha for four years, operates on a much larger scale than permitted. While the government allows an 8x8-meter mining lease, Vikram has expanded to 200x200 meters. He has an agreement with the farm owner to pay 25% of the diamond’s value and spends over ₹50,000 weekly on wages.

In Chhatarpur district, Ramu Adivasi found a diamond in the Runjh River, but its quality is unverified. A dam under construction on the Runjh River is 70% complete. Once finished, it will submerge the river's diamond-mining areas, ending this source of illegal mining.

The Madhya Pradesh government has initiated awareness programs to combat the illegal diamond trade in Panna. Despite these efforts, cash transactions and large-scale unauthorised mining operations undermine regulatory efforts. Monitoring the sprawling mining areas remains a challenging task as mine inspectors and constables approach retirement age.

In India, diamond resources are mainly found in three states, with Madhya Pradesh holding 90.17% of the country’s diamond reserves. According to the Indian Bureau of Mines (IBM), Madhya Pradesh has 28.7 million carats, while Andhra Pradesh has 1.8 million carats and Chhattisgarh has 1.3 million carats.

The National Mineral Development Corporation (NMDC) in Madhya Pradesh has a mining capacity of 84,000 carats per year. To date, they have recovered around 1 million carats from the region. The NDMC Panna mine is the only mechanized diamond mine in the country, covering more than 74 hectares. However, smaller mines in Panna use traditional open-cast mining techniques.

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