With its small size and risky location, Murowa won’t be making the cover of
Situated 40 km outside Zvishavane in south-central Zimbabwe, Murowa comprises three kimberlite pipes discovered in 1997.
The project is managed by Rio Tinto, which holds a 78% interest in the mine, while the remainder is held by RioZim, a Zimbabwean-listed company and former Rio Tinto subsidiary.
Rio Tinto carried out feasibility studies and mine planning from 1998 to 2000, and delineated reserves, in the two largest pipes, of 18.7 million tonnes grading 0.9 carat per tonne.
The US$40 million so far spent on the project included a US$5.5-million expenditure to relocate more than 900 people in 140 families to six farms purchased by the joint venture under a government resettlement program.
The Murowa partnership provided the families with new homes and newly prepared plots for seeding.
For the mine, Rio Tinto built a treatment plant, security facilities, access roads, office buildings, and power supply. The mine employs about 90 people, including 30 locals.
Murowa started up in the third quarter of 2004 and, during that period, produced 3,000 carats from 4,000 tonnes of ore. In the subsequent quarter, 44,000 carats were produced from 27,000 tonnes.
During 2005, the mine should be producing at an annual rate of 200,000 tonnes, with potential for expansion.
The value of Murowa’s diamonds is expected to average US$65 per carat over the life of the mine, though better-quality and larger stones will likely be recovered initially.
Rio Tinto’s share of diamond production from all its operations totalled 25.2 million carats in 2004. The wholly owned Argyle mine in Australia produced 20.6 million low-value carats (nearly a quarter of the world’s diamonds by volume); the Diavik mine in Canada, in which Rio holds a 60% interest, produced 4.5 million top-quality attributable carats; and Murowa, in which the company has a 78% stake, turned out 36,000 attributable carats.
The recently established unit Rio Tinto Diamonds sells its Argyle, Diavik and Murowa output separately so that the national identity of each production remains identifiable.
Diamond sales are held 10 times per year in Antwerp, Belgium, though some Murowa diamonds may also be sold locally. The first sale of Murowa diamonds was to have been held in Antwerp in December 2004, but the results are not yet public.
Despite this initial success, Rio Tinto has developed the Murowa mine against the backdrop of a Zimbabwean economy that is disintegrating yearly under the harsh and erratic rule of President Robert Mugabe and his Zanu-PF party.
Further troubles surfaced last March as the national government introduced, and then withdrew, a bill that would have forced the Murowa partnership to sell 49% of its interest in the mine to black Zimbabweans, who most likely would have had strong connections to the ruling party.
Ian Saunders, president of the Zimbabwe Chamber of Mines, responded last year to the Mines and Minerals Amendment Act by suggesting that selling a 25% stake to local blacks over 10 years would be a more realistic target, and in line with South Africa’s policy of forcing companies to sell 26% of their mining assets to local blacks over 10 years.
Other foreign mining houses with major investments in Zimbabwe include Impala Platinum, Anglo American Platinum, Metallon Resources, and Mwana Africa Holdings.
Meanwhile, the Zimbabwean government says it hopes to attract Chinese investment into its mining industry, particularly the platinum sector.
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