Murowa diamond
mine in southern
Zimbabwe
 
Victoria Falls, Zimbabwe — MININGREVIEW.COM — 01 June 2010 – Rio Tinto’s Murowa diamond unit in Zimbabwe has begun work on a US$300 million (R2.25 billion) expansion programme to raise output six-fold, and is discussing with the government ways to improve the investment climate in mining.

Murowa head Neils Kristensen said the company had begun preparatory work for the planned expansion of its 300 000-carat-per-year diamond mine in southern Zimbabwe.

Rio Tinto owns 78% of Murowa, while Rio Zim “’ a wholly Zimbabwean-owned unit spun off from Rio Tinto in 2004 “’ controls the remainder.

“We have reinvigorated our feasibility study for a major expansion. The expansion will increase production by a factor of 6 to 7 times and double jobs,” Kristensen told Reuters on the sidelines of a weekend mining conference here. “That would push our capacity to 1.8 million carats per year of high quality production, which is predominantly gem.”

Rio Zim said last week that the possibility of an improved investment climate in Zimbabwe had prompted Murowa shareholders to commission a review of expansion feasibility studies, to be completed by the end of 2010. “This expansion project should take place in the medium-term,” Kristensen said.

“We’re looking at up to US$300 million (R2.25 billion) for which we would put up an investment proposal to shareholders and obtain approval for what should be a fairly big expansion,” he added.

“We have seen a significant improvement in the economy and the operating environment over the past year,” said Kristensen. “Internally, there have been many positive developments, but externally, we have experienced very low prices as a result of the global financial crisis,” he pointed out.

Kristensen said production at Murowa was improving and would surpass 2009 output, which had more than halved to 124 422 carats, compared to the 263 000 carats produced in 2008.

“Going forward, we are well positioned. We’ve made some investment in plant and equipment, and we commissioned a plant which will increase throughput and deal with the hard ore in October 2009.”