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The Buxwaha Forest Fallout and Future of Diamond Sourcing in India

Abstract: Buxwaha Forest in Chattisgarh has been identified by the Government as an immensely valuable source of diamonds. However, it is also a dense jungle, populated by around 7000 tribals who claim it as their ancestral home. Diamond mining, if authorised by the Government, will lead to the eviction of the natives along with a plethora of environmental issues. Ultimately, this article will try to answer whether the economic benefits outweigh the social costs and if there exists a more amenable alternative.

The Buxwaha forest is located in the Chhatarpur district of Madhya Pradesh which is about 247 km northeast of the state capital of Bhopal. The total population of the region is around 10,216 people according to the 2011 Census, out of which 7000 are tribal people. The area is an ancestral dense forest that is constituted of a plethora of flora and fauna species. This article explains the events that took place in the region when the Government of the State passed the order for diamond mining, not just once but twice, and the subsequent public outcry. The article will look at the outcomes of mining from an economic point of view and from the perspective of the larger consciousness of the state. It will also attempt to provide a logical set of alternatives for diamond mining techniques.

Diamond mining is a water-intensive process and the proposed water usage for the project is 16050 cubic meters of water a day (page 25 of the report) as reported in the pre-feasibility report of the project submitted by the Essel Mining and Industries Limited (EMIL) of the Aditya Birla Group. Since the same report projects the setup to run for 14 years, it will have serious implications for the water crisis in the already dry region. Not just in terms of water consumption, but mining also has the potential to pollute the groundwaters in the area as it involves the extraction of minerals using chemicals. As the region is mostly dependent on the monsoon for a recharge in its water table, it also implies that there is no large perennial water source in the lease area. The water is to be sourced from the seasonal ‘Nala’ by diverting its flow and the ‘Nala’ can store only up to 17 million cubic meters of water. Upon this, the EMIL will consume the groundwater and the water stored in rivers and canals of the region causing a grave imbalance in the water cycle being maintained by the inhabitants of the protected areas. There exists no eco-sensitive zone (page 6) in a 10 km radius around the leased site including any wildlife areas – the closest one is Panna Tiger Reserve which has a buffer zone at 19 km from the site. 

On 18th June 2021, the High Court of Madhya Pradesh stayed the process of forest clearance for a diamond mine project which was expected to cover 382.131 hectares of forest land in the Buxwaha forest in Madhya Pradesh, India. The tribunal judgement came as a reaction to the appeal of conservationists from around the world who were concerned about its implications for the 7000 people living around the area and its ecological impacts on the biodiversity of the region. While large economic projects can bring in money in markets and creating avenues of industrial growth has always been at the core of all government policies across the world, millennials seem to be more focused on the environment and sustainability.

The mining project in Buxwaha forest has already faced heat from locals and environmentalists in 2016 leading to its exit of Rio Tinto from Bunder. Headquartered in London, Rio Tinto is one of the largest diamond mining companies in the world with projects across the globe, including Australia, Canada and India. It operates in mining, exploration, and processing of mineral sources and is ranked 94th among top companies in terms of market value. Four years after Rio Tinto’s exit from the proposed project, residents do not seem to be accepting any change in their stand. The diamond mine in Buxwaha is supposed to be India’s largest with a potential worth of 34.20 million carats of diamond and the project is won by EMIL.

India has lately been a crucial player in the global diamond market, but owing to scarce diamond resources in the country, the Indian diamond industry needs to produce more to remain competitive in the global markets. Mines in Buxwaha can be a game-changer in India’s gem industry by providing India with plenty of home-produced diamonds which are otherwise imported by cutting and polishing industries. The contribution of the gold and diamond industry to India’s national Gross Domestic Product ( ~7.5% as of January 2021) is significant and therefore a stay on the project can put pressure on the industrial output. Moreover, EMIL also projects to generate employment for more than 500 people (direct and indirect) in the area which can possibly see a large number of locals joining in for the low-skilled work.

However, artificial diamond production needs to be a focus area that all governments must look at rather than emphasising too much on natural diamonds. Despite the latter having a greater share in the global diamond market, the artificial diamond industry is gaining momentum. Pandora, the largest diamond jewellery producer in the world, has decided to say a ‘no’ to mined diamonds as millennials turn to eco-friendly fashion. China alone amounts to about 53% of global artificial diamond production in 2019 while India ranks second with 13%. Despite performing better than most other countries, India should invest in the technology of the future to make diamonds in the industry as that is a more sustainable solution. Greater adoption of lab-grown gems, which has been continually opposed by the likes of DeBeers, has led to a slide in the prices of these precious stones which now costs roughly half the price per unit of mined diamonds. A report by Reuters(2018) says that over the past decade the cost of one-carat lab-grown diamonds have plummeted from $4000 to $300. As the technology evolves and acceptance grows, the future is all set to welcome an era of cheap lab-grown diamonds which will be more affordable than ever.

There are possibilities to make an EMIL project run on electricity generated from solar power to do away with some of the carbon footprint generated in a step closer to no-environmental impact. Though the projected value of the diamond industry (Rs 55000 crore) is a huge amount for economy, upcoming technologies can be more beneficial for the companies and country. In fact, fifteen Indian cities rank among the Top 20 most polluted cities in the world – India should use this opportunity to convert smog into diamonds, as successfully demonstrated by Daan Roosegaarde by creating smog free towers. Though this technology is still in its nascent stage, it is successful and tested, therefore Indian industry should welcome and adopt this technology. 

Greater investment in research here can pave the way to make it more feasible. While industrialisation is key to bringing in development in the country, efforts have to be made to minimize the environmental impacts that it causes. Taking a cue from Beijing works well for India where the current air-pollution records seem to be breaching all records across the country.

Author Bio: The co-authors of this piece are Anugrah Singh and Ankit Shaw. They are undergraduate students at Ashoka University majoring in Economics and Finance. They are both fascinated with writing and this interest led to some early exposure to reading in their high school which carried on into their University lives. Social impact entrepreneurship interests Anugrah and he intends to work in this sector in near future. Ankit is a bibliophile and research work attracts him a lot.


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