Ex-Rio Diamond Unit in Zimbabwe Targets Fourfold Output Gainby
Producer wants to raise output to 1 million carats in 2016
Murowa commits $60 million to expand mine over four years
Murowa Diamonds Pvt Ltd., a former unit of Rio Tinto Group in Zimbabwe, wants to expand output of the gems fourfold this year, officials said.
“Our plan is to produce more than a million carats this year,” Lovemore Chimuka, a spokesman for the company, said in an interview at the Murowa mine, 348 kilometers (217 miles) southeast of the capital, Harare. Production was 250,000 carats in 2015, he said. The company will inject $60 million into the mine over the next four years as part of expansion drive, he said.
Rio sold its 78 percent stake in Murowa in June last year to RioZim Ltd., its former local unit. Prices for the stones are at six-year lows after slumping 18 percent in 2015, the most since the 2008 global financial crisis, according to data from WWW International Diamond Consultants. Demand in China, the biggest market after the U.S., has shrunk along with a slowing economy and a crackdown on corruption that’s discouraged open displays of wealth.
The investment will go ahead despite the decline in prices, Chairman Lovemore Chihota said.
“Some mines are closing due to low prices of diamonds, but we believe as the sun rises and sets, it will come back soon,” he said.
Managing Director Zebra Kasete will be leaving at the end of this month and will be replaced by Ellah Muchemwa.
Mining is the biggest source of foreign exchange for Zimbabwe, which has the world’s largest platinum reserves after South Africa and also has chrome, gold and iron ore.
Murowa, which produced 450,000 carats in 2014, intends to be the biggest diamond miner in the country, Chimuka said.
“With this new capital injection we want to increase mine life and also increase our operations,” he said. “Last year was a bad year, but we want to do well this year.”
Production of diamonds in the nation fell to 420,000 carats in the first five months of 2015 from 660,000 carats a year earlier.