Rio Tinto could be on course to get a mining lease for its $480m diamond mining project in the Indian state of Madhya Pradesh, a ministry official said.

The state government has recommended the mining lease and an approval from the federal mines ministry is expected within two weeks.

If the company obtains all the regulatory approvals in time, the project could start by 2016.

Rio Tinto is targeting to mine about three to four million carats per annum.

The company is planning to carry out a pre-feasibility study of the project in 2010.

The Bunder diamond project in the Chhatarpur district of Madhya Pradesh has estimated reserves of 37 million tons and at 0.7 carat per ton, the project would give 27.4 million carats of diamond.

The mine is located close to Panna, India’s sole hardrock diamond mine, and may yield 30 times more because of greater reserves.