But the companies, such as Rio Tinto and BHP Billiton, have decided to shift their gaze elsewhere after consulting the state government on how long it could take for the security operations against the Maoists to wind down.
We had applied for a reconnaissance permit for the Bastar region, but the state government has asked us to explore other zones instead, Nik Senapati, the India managing director of Rio Tinto, told The Indian Express.
The companys application was based on aerial surveys which indicated there are diamond bearing deposits in the region. The Bastar region is geologically one of Indias three oldest zones, the other two being the Deccan Plateau and the Bundelkhand region.
Diamonds have been found in both regions in the ancient Golkonda mines and the more recent Bunder block. Rio, one of the worlds largest commercial mining companies, is working on the latter and hopes to start excavation by the end of financial year 2018.
But Chhattisgarh has informed the company that it cannot provide adequate security cover to its employees to work in the Bastar region. Based on the data gleaned from the reconnaissance permits, Rio would have moved to the next stage to apply for a exploration permit.
The Raman Singh government has instead approved the application from the British-Australian company to explore for the mineral in the Korba Hills in the north of the state. Bastar is to the south and comprises the five districts of Bijapur, Dantewada, Bastar, Kanker and Narayanpur.
The Chhattisgarh government has forwarded our application for exploration licence at Korba to the union mines ministry, said Senapati.
The state geological department has often suspected there could be diamonds in the Bastar region but these had remained unproven. The five districts form a sprawling 40,000 sq km zone.
Diamonds are potentially available in what are geologically known as Kimberlite pipes that had spewed lava billions of years ago. Some of those turn out to be diamondiferous or those with extractable reserves of the mineral.
From finding such a pipe to setting up a mine and extracting even one piece can take more than 10 years, said Senapati.