Fin24

Rio's Zimbabwe diamond output surges

2012-03-30 10:42
Harare - Diamond output at Rio Tinto’s Zimbabwe unit more than doubled to 324 000 carats last year, the local minority shareholder in the venture said on Friday.

RioZim Limited, which holds a 22% stake in the Murowa mine in southern Zimbabwe, said in a statement production rose to 324 000 carats from 141 000 in 2010. It did not give further details.

Murowa is planning a $300m expansion to lift output to 1.8 million carats but has delayed the project due to a law that seeks to force foreign-owned firms, including mines, to cede 51% shares to locals. Rio Tinto controls 78%.

Rio Tinto told Zimbabwe’s government last October that it had agreed to give up 51% stake in Murowa to comply with the economic empowerment law.

The heavily criticised law is aimed mainly at mining firms and banks operating in the resource-rich country, which is in a fragile recovery after a decade of contraction.

Rio Tinto, the world’s third-largest miner, effectively invited bids on Tuesday for its diamond business, including the Zimbabwean operation, and joined BHP Billiton in a retreat from an industry that has lost its sparkle for mining majors.
Read more on:    rio tinto zimbabwe economy

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