Diamond project in South Kalimantan is likely to be scrapped

State mining company PT Aneka Tambang Tbk said on Tuesday it was likely to close down its diamond project in South Kalimantan this year if its Anglo Australian partner Rio Tinto failed to find buyers of its shares in the project.

The alluvial diamond mining project, located in the Banjar regency, is owned by PT Galuh Cempaka. Rio Tinto has 48 percent shares in the company after buying out Australian firm Ashton last year. The remaining shares are held by Antam (20 percent) and Malaysian Mining Coroporation (32 percent).

Antam did not specify why Rio Tinto was seeking to sell its shares in Galuh Cempaka or whether Antam was interested to buy the shares. But, it said explorations by the joint venture had thus far only found lower grade diamond resources in the area.

"The project's future remains uncertain at quarter end as Rio Tinto/Ashton sought a purchaser. If a purchaser cannot be found that it is likely the project will be closed during the upcoming two quarters," the company said in a statement made available to Petromindo.Com.

Galuh Cempaka has reportedly spent US$20 million for exploration. (Alex)