Murowa Q1 production down 60 percent on tax fears

Murowa Q1 production down 60 percent  on tax fears

HARARE April 21 (The Source) – Rio Tinto Plc’s Murowa Diamond has reported that output for the first quarter fell by 61 percent to 40,000 carats compared to the previous quarter due to a plant shutdown and worries over a 15 percent export tax.

Zimbabwe’s government first proposed the tax on unrefined mineral exports, notably platinum, in 2013, in an effort to push mining companies to process the metal domestically. Late last year, however, it said it would postpone it until January 2017 to give miners time to build the smelting and refining plants.

But the Finance Bill, which was published on January 9, proposed its introduction from January 1, causing concern among miners in the country.

“Carats recovered at Murowa were significantly lower than the comparator periods due to a planned plant shutdown to reconfigure the processing plant and a decision to reduce production rates pending confirmation (subsequently received) that a new 15 per cent export tax did not apply to Murowa,” the company reported in a trading update on Tuesday.

Global resources giant Rio Tinto has a 78 percent interest in the company while the remaining 22 percent shareholding is owned by local miner, RioZim Limited.

Ore processed in the period under review amounted to 117,000 tonnes while diamonds recovered totaled 51,000 carats.

The future of the mine is uncertain, after government proposed to bring all diamond mining operations in the country under one firm in which the state will have a 50 percent shareholding.

Other diamond miners in the country include Marange Resources, Diamond Mining Company (DMC), Anjin, Jinan and Mbada Diamonds which operate in the Chiadzwa area and the moribund River Ranch Mine in Beitbridge.