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Panna: Illegal mining rampant in India's only diamond producing region

Ask anybody in Panna about diamond mining and the response will be: “Number 2 or Number 1?” For locals, the former is illegal and the latter legal.

In the country’s only diamond producing region, situated nearly 400 km from Bhopal in northeastern Madhya Pradesh, illegal mining is rampant, with even Gond tribals, besides other locals, being involved in the trade.

Extending 240 km along the Vindhya ranges in Bundelkhand region, diamond deposits can be found in forests, farms and government land.

While the National Mineral Development Corporation (NMDC) operates India’s only mechanised diamond mine at Majhgawan in Panna, the government or local administration leases 8X8 metre plots of private or revenue land to prospective miners in the rest of the district.

Diamond hunters dig for gravel, wash it in water and look for the sparklers in the gravel. Once a lessee finds a diamond, he or she has to deposit it at the diamond office, where all diamonds are valued and then auctioned quarterly, with state government getting a royalty of 11.5 % on the sale value. The rest goes to the lessee after deduction of taxes.

Last year, 838 carats of diamond from 952 8x8m mines was submitted at the Panna diamond office.

But many claim this is significantly less compared to the overall diamonds unearthed in the whole of Panna. Diamond hunters sell the best quality gems directly to middlemen who send them to traders in Surat, Mumbai, Hyderabad and elsewhere.

People associated with the trade cite the slow auction process, government apathy and huge royalty as reasons for taking to the illegal route.

In Forests

Diamonds found in forests are much sought after as they are generally big in size and found near the surface, according to locals. After the forest department notified the protected areas, mining has been banned in the jungles.

However, HT learnt of illegal mining in Hurra Chowki forest area close to Panna Tiger Reserve. Gond tribals, engaged in the activity, fled the spot on seeing the HT team.

They had hidden their tools like baskets, shovels and sieves under rocks alongside a stream. At many points along the stream there were fresh signs of digging, cleaning and drying of the diamondiferous gravel.

In Babupur forests, on the outskirts of Panna town, pits were scattered across the terrain.


Missiles, tanks and contingents that have featured at Republic Day celebrations over the years in the national capital

While NMDC operates India’s only mechanized diamond mine at Majhgawan mine in Panna, in the rest of the district shallow mines are leased to prospective miners on an annual lease by the govt.
Last year, 838 carats of diamonds were unearthed from 952 leased shallow mines and submitted in the office.
The customary practice of shallow mining by local miners in Panna has been carried out here for a long time.
With a view to recognize and regulate the shallow diamond mining, MP government via a circular in May 2004 notified Heera Parichalan Nidhi Rules, 2000.
According to these rules, the 4 to 5 inch thick diamondiferous gravel layer is found anywhere between 2 feet to 20 feet.
The diamonds are deposited at Panna office and auctioned four times a year.
Majhgawan mine has an incidence of roughly 10 carats per 100 tons of tuff material and a capacity of unearthing 84,000 carats per year.

A Gond tribal in Hurra Chowki, on condition of anonymity, told HT that they targeted the forests as the chances of finding big diamonds close to the surface was more here.

“We are poor people. (In forests) We don’t have to pay any money to land owners or the officials. But there is always this danger of getting caught by forest officials. Being poor and with nothing to lose, we go for this gamble,” he said.

Field director, Panna Tiger Reserve, Vivek Jain said appropriate action would be taken against violators.

“We make best possible efforts to ensure there is no mining activity in the forest areas or inside the buffer zone,” he said.

On government land

At Kamla Bai ka Talab area on the outskirts of Panna town, where shallow mines have been given on lease, some people were engaged in diamond mining despite expiry of leases as on December 31.

The officials at the diamond mining office in the collectorate told HT that they had received around 50 applications for renewal of leases but the same were yet to be granted.

Though leases are granted for 8X8 metre plots, HT found the shapes and sizes varied, with many quite larger than the stipulated size and some as deep as 20 metres.

Though mines have to be filled up, pockmarked terrain of Panna showed it was not the case most of the time.

On farms

Sanat Kumar, a veteran diamond digger in Itwa and Brajpur, told HT that on farm mines, the land owner gets about 25% of the sale value of diamond, if found.

So, the miner, who has already invested Rs 15,000-50,000 in labourers, does not want to lose further money on royalty and taxes. If caught, these miners use the excuse that they are digging a well.

Similar illegal mining was being carried out in Dalhan Chowki village close to Panna Tiger Reserve.

Here, people who got the lease for mining on one plot dug up adjoining areas also.

“People here think it is their land and these are their diamonds. Why should outsiders get lion’s share in the profits?” asked an elderly Shyam Lal.


After mining, the sale is done through middlemen, who frequent the area.

“Dalal fix hotey hai (middle men are always in the loop). When they find a good diamond, they inform them on phone and then a deal is struck after on-spot check of the diamond’s quality,” a 34-year middleman from Itwa told HT wishing anonymity, adding that they get 2% of the cut.

90% diamond sold illegally: minister

Local MLA and minister Kusum Mehadele alleged that roughly 90% of the diamonds unearthed from Panna are smuggled out, especially with regard to big diamonds.

In August last year, a 72-carat diamond, almost the size of a gooseberry, was found by a villager in Panna. And expectantly it was sold illegally. It would have fetched around Rs 40-50 crore, she said, adding that after she wrote to chief minister Shivraj Singh Chouhan, an FIR was registered in the matter.

Staff shortage

Diamond officer, Panna, Ratnesh Dixit told HT that with ten sepoys, they were trying their best to keep a tab on over 950 mines in the district.

“Right now, we don’t have a diamond inspector (in the past there were three diamond inspectors). In the last two years, we have taken action against eight people for mining violations,” he said.

He refuted allegations of rampant illegal mining, saying only people who had to pay to labourers immediately, did so.

Source: HindustanTimes