Rio Tinto bows out of Zimbabwe with diamond, coal asset sale

Rio Tinto bows out of Zimbabwe with diamond, coal asset sale

HARARE, June 26 (The Source) – Global giant Rio Tinto Plc on Friday announced the sale of its diamond and coal mining assets in Zimbabwe to RZ Murowa Holdings, marking the withdrawal of one the world’s iconic mining firms from the country after a 60 year presence.

Before the announcement, Rio owned 78 percent of the Murowa diamond mine in central Zimbabwe and 50 percent of the undeveloped Sengwa coal project. Rio’s Zimbabwean spin-off, RioZim, owns 22 percent of Murowa and 50 percent of Sengwa.

Sengwa, with an estimated coal resource of 1,3 billion tonnes, is the site of a planned 2,000 megawatt thermal power station – enough to meet Zimbabwe’s current peak electricity demand. Murowa is a world-class diamond miner, churning out 300,000 carats annually.

Zimbabwe’s government has, however, announced plans to nationalize all diamond mining, including Murowa.

Details of RZ Murowa Holdings are unclear, but a statement issued by Rio suggests it is an entity controlled by the Zimbabwean-listed RioZim, whose largest shareholders are Harpal Randhawa’s GEM (24 percent) and Old Mutual, with 11 percent shareholding.

“Rio Tinto has completed the sale of its 78 per cent interest in Murowa Diamonds and 50 per cent interest in Sengwa Colliery Ltd (Sengwa) to RZ Murowa Holdings Limited. RioZim Limited, an independent Zimbabwean mining company listed on the Zimbabwean Stock Exchange already holds a 22 per cent interest in Murowa Diamonds and a 50 per cent interest in Sengwa and will assume the overall management of both entities,” Rio announced.

“Rio Tinto believes that the future of these assets can be best managed by entities with existing interests in Zimbabwe.”

Rio Tinto Diamonds and Minerals chief executive Alan Davies said the firm remains committed to the diamond industry and is focused on operating its two world-class underground mines whilst obtaining the approvals for its advanced diamond project in India.