Anglo-Australian miner Rio Tinto plans to invest $500m in a diamond project in India's Madhya Pradesh state, according to chief executive officer Sam Walsh.

The company is awaiting approvals from Indian authorities to start the project, Walsh said in New Delhi on 12 January, reports said.

Rio Tinto has sought approval to bring Madhya Pradesh's Bunder diamond mine into production by 2019. The mine, located some 640km southeast of New Delhi, will reinstate India as a major producer of diamonds.

India, which has yielded the Koh-i-Noor diamond, now among Britain's crown jewels, has one small diamond mine in production at present.

Bunder's annual production rate will be about 20 times higher, Rio said in a filing. The firm already employs about 300,000 workers in India to cut and polish diamonds from its Argyle mine in Western Australia.

Walsh said: "We're waiting for approvals, forestry and environment approvals, which I am hopeful will come through in the near term."

Tim Schroeders, a portfolio manager who helps manage $1bn in equities at Sydney-based Pengana Capital told Bloomberg: "Strategically, it probably makes a lot of sense. Whether they make a lot of money out of it, I'm not sure."

Rio is betting that Indian Prime Minister Narendra Modi's business-friendly government can expedite the approvals process: the miner has waited patiently for over a decade to begin mining at Bunder and nearly two decades to set up a $2bn (£1.3bn, €1.7bn) iron ore project in the eastern Odisha state.

Rio inked an initial agreement for the Bunder project over 11 years ago, while it has been close to 20 years since an agreement for the Odisha project was signed.