(NEWZIMBABWE) Rio Tinto to keep Murowa Diamond Mine
24/06/2013 00:00:00
by Business Reporter
GLOBAL resources group Rio Tinto is set to retain its interest in Murowa Diamond Mine after the company reversed a decision to dispose of its diamond business.
The world’s number three miner said Monday it was calling off the proposed US$1.3bln sale of its diamond operations in operations in Australia, Canada and Zimbabwe after buyers failed to meet its asking price.
Rio Tinto has a 78 percent interest in Zvishavane based Murowa diamond with the balance owned by the locally listed RioZim Limited.
"After considering a number of alternative strategic ownership options it is clear the best path to generate maximum value for our shareholders is to retain these businesses," said Rio Diamonds and Minerals chief executive Alan Davies in a statement on Monday.
"The medium-to-long-term market fundamentals for diamonds remain robust, fuelled by growing demand for luxury goods in Asia and continuing strong demand in North America.”
Rio Tinto put its gem business up for sale in March last year after following a sharp fall in prices amid concerns about the eurozone crises crimping demand. The diamond unit reported a $43 million loss in 2012, down from a profit of $10 million a year earlier.
Following the announcement last year RioZim had indicated its interest in taking over majority control of the Zimbabwe unit.
"We're now in discussions with Rio Tinto Plc to acquire the 78 percent of Murowa that they want to offload," said Harpal Randhawa, whose private equity group Global Emerging Markets (GEM) recently bought 25 percent of RioZim.
Murowa has since agreed a deal with the government for compliance with indigenisation laws which require foreign firms to transfer control and ownership of at least 51 percent of their local operations to Zimbabweans.
Labels: DIAMONDS, MUROWA DIAMOND MINE, RIO TINTO
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Rio Tinto hands over 52 percent of Murowa Diamonds
08/10/2011 00:00:00
by AFP
MINING multinational RioTinto's Zimbabwean subsidiary Murowa Diamonds has ceded 51 percent of its equity to comply with a new law giving local blacks majority shares in foreign companies, a news report said on Saturday.
"Murowa Diamonds wrote to us yesterday saying they have given up 51 percent shares and these would be given to our people," the state-owned Herald newspaper quoted Indigenisation Minister Saviour Kasukuwere as saying.
The mine, located in the Midlands town of Zvishavane, was commissioned in 2004 with Rio Tinto owning 78 percent while the balance was controlled by Rio Zim, a local entiry listed on the Zimbabwe Stock Exchange.
Zimbabwe gave foreign companies including banks and mines up to September 25 to submit plans to sell 51 percent of their shares to the black community by 2015.
An official in the indigenisation ministry said around 700 companies had missed the deadline, warning them to follow the law or risk de-registration.
But Zimbabwe has also proved willing to strike individual deals with companies, giving platinum-mining giant Zimplats more time to submit its proposal and allowing British insurer Old Mutual to conduct a "first phase" of compliance by handing over 25 percent of its shares.
Still resistance to the empowerment regulations remains in pockets of the country’s lucrative mining sector, Kasukuwere said.
"The general trend of submitted plans shows a level of resistance in moving away from the proposal by the Chamber of Mines of Zimbabwe. The mining businesses are offering to dispose 26-30 percent as equity on commercial value,” he said.
“The balance is to be claimed as empowerment credits for corporate social responsibility programmes. It appears this approach has been agreed to and co-coordinated under the Chamber of Mines of Zimbabwe.
Kasukuwere said some companies were proposing to dispose of equity to individual Zimbabweans or to indigenous consortia rather than to designated entities as prescribed by the law.
"My overall assessment is that over 90 percent of the submitted proposals do not meet the minimum requirements and there seems to be an element of resistance. However, I am meeting the various mining houses to achieve agreement on compliance with the law," he said.
President Robert Mugabe says the indigenisation law aims to fight poverty and put control of the economy in local hands, but the scheme has raised tensions within the shaky unity government with Prime Minister Morgan Tsvangirai.
Tsvangirai's party, which holds most economic portfolios in government, fears the law will scare off investors.
Labels: DIAMONDS, MUROWA DIAMOND MINE, RIO TINTO, SAVIOUR KASUKUWERE
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Biti calls for diamond deposit audit
By: Our reporter
Posted: Monday, November 29, 2010 4:57 pm
FINANCE Minister Tendai Biti has called for a valuation of the country's diamond deposits, particularly in the Chiadzwa region. Minister Biti did not mention other diamond mines in the country which are largely controlled by foreigners at River Ranch and Murowa.
According to the report, current estimates put the potential annual yield from the Chiadzwa diamond fields at $2 billion.
In volume, Chiadzwa is expected to produce 2.7 million carats of rough diamonds in 2010, bolstered by some 300,000 carats of diamonds from River Ranch and Murowa.
Production in 2011 could reach 4 million carats.
Currently, three diamond mining firms have been licensed to mine at Chiadzwa – Mbada Diamonds, Canadile (currently under corruption investigation), and Anjin China.
Biti cited a number of other issues in Zimbabwe's diamond sector that should be addressed by the Zimbabwe government, including Kimberley Process certification; the process of handing out mining contracts; standards for policing mining and alleged smuggling; and compensating communities whose members have been relocated by the diamond mining industry.
He did not indicate whether the same demands will be made to Murowa Diamonds, which is 78 percent owned by Rio Tinto plc with the remainder held by RioZim - a subsidiary of Rio Tinto.
In his budget presentation last week before Parliament, Biti stated that Chiadzwa diamond production accounted for 2.7 million carats, and another 300,000 carats were produced at River Ranch and Murowa.
He told Parliament that rough diamond sales in August generated proceeds of $56.5 million and sales from September reached $29.9 million. From those sales, accruals to government were almost $42 million.
Labels: DIAMONDS, MUROWA DIAMOND MINE, TENDAI BITI
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Murowa mine laments diamonds export ban
by Reuters
28/05/2010 00:00:00
THE chief executive of Murowa Diamond mine said on Friday he was disappointed with government's ban on diamond exports but hoped to quickly resolve the issue.
Mines minister said on Thursday all diamond exports, including from those the Zvishavane-based Murowa Mine, had been halted until stones from the government's controversial Marange fields were certified by industry regulators.
"We are disappointed that we have been dragged into the issues in the east of the country, which are far removed and having nothing to do with us," Neils Kristensen, Murowa chief executive said on the sidelines of a mining conference in Victoria Falls.
He would not say how much Murowa would lose as a result of the ban. Murowa mine, which produced 124,000 carats last year, and privately owned River Ranch, are both certified by the Kimberley Process Certification Scheme to export diamonds.
Zimbabwe Stock Exchange-listed RioZim limited has a 22 percent interest in the mine while the balance is controlled by global resources group Rio Tinto PLC.
Government’s decision to impose a blanket ban on exports was triggered by increasing frustration over the delays by the Kimberly Process certification scheme (KP) to allow trade in stones mined from the Marange fields.
"As Government we view Zimbabwean diamonds as Zimbabwean diamonds regardless of where they are mined. We have a clear distinction where certain diamonds can be viewed as acceptable while others are not.
"We cannot continue as Government to facilitate that kind of misguided approach to our diamonds by our detractors," Minister Mpofu told the state-owned Herald newspaper.
Labels: BLOOD DIAMONDS, DIAMONDS, KIMBERLEY PROCESS, MUROWA DIAMOND MINE, OBERT MPOFU
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