In rural India, wealth just out of reach

The broad course of the Indrawati River holds nothing but sand these days. Just beyond its parched banks, through reedy trees seared by 100-degree heat, little in the village of Pailikhand stirs: A woman picks through yellow mahua seeds, a police officer hangs his laundry.

Pailikhand is waiting for rain.

Throughout this corner of rural India, the monsoon rains are a meteorological alarm clock, rousing men and women to a season of work in the rice paddies. But here in Pailikhand, they mean something potentially more rewarding: diamonds.

The hills east of town are so saturated with diamonds that the stones wash away with a strong rain, settling along the banks of the Indrawati. Come the monsoons, many men can be found, not in the fields, but along the riverside, sifting through muddy soil with wicker baskets.

Pailikhand is the center of a new Indian diamond rush, and prospects here range from the promising to the fantastic. The state of Chhattisgarh could become one of the top 22 diamond-producing regions in the world – or better, according to a state report. Mining could bring $5.7 billion annually to the state, estimates Chief Minister Raman Singh, leader of the Chhattisgarh assembly.

Or, perhaps, it will bring nothing at all. The story of Pailikhand is more about frustration than fabulous riches – a classic Indian tale of how confusion and the inefficiencies of an overloaded court system can turn can't-miss millions into a long slog of legal motions.

Since a court order suspended all legal mining here six years ago, those seeking diamonds have had to skulk along the banks of the Indrawati in secret, selling their contraband for a pittance on the black market.

In tiny Pailikhand, where the police presence doubles to 12 in the monsoon season specifically to protect the state's treasure, no one will admit that he goes to the river. But despite the heightened security, many do. "It's a huge area, the police can't cover it all," says local Kesri Ram. "Everyone is waiting for the rains."

Diamonds: A lawyer's best friend

After all, they have given up waiting on the courts. In 2001, the state alleged that the B. Vijay Kumar mining company was sending more samples from Pailikhand abroad for analysis than was permitted under its contract. B. Vijay Kumar contested the charge, and the Chhattisgarh high court issued a stay – stopping all mining in the hills around Pailikhand until it reached a decision.

It still hasn't. In fact, it isn't even close, says a local lawyer. "Now, nobody is serious," says Vinod Chawada, who specializes in natural-resource law and is familiar with the case.

For its part, B. Vijay Kumar has refused to abandon its claims to the site. Meanwhile, the government has moved on to other areas of the state, where it is allowing companies like South African diamond giant DeBeers to search for new deposits, in hopes of beginning diamond production by 2010.

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