Mining giant Rio Tinto (LON:RIO) is leaving Zimbabwe after agreeing to sell its 78% stake in the Murowa Diamonds mine and its 50% holding in the Sengwa Colliery mine to its former local unit, RioZim Ltd.
“Rio Tinto believes that future of these assets can be best managed by entities with existing interests in Zimbabwe,” the world’s second-largest miner said Friday.
The move doesn’t mean that Rio Tinto is giving up on diamonds, Alan Davies, head of the diamond and mineral unit, said in a statement.
“Rio Tinto 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,” Davies noted.
Earlier this year Zimbabwe announced plans to merge all diamond miners, including Rio’s local unit, into one company in which the state would own 50% of the shares as part of its black economic empowerment programme (BEE).
Most of the companies in Zimbabwe, one of the world’s top diamond-producing nations, concentrate on alluvial diamond mining, which requires less capital as they are easily extractable through open cast mining.
But the country has practically run out of alluvial gems deposits and existing miners argue they have neither the expertise nor the resources to search for new deposits underground. Yet Zimbabwe still holds enough diamonds to meet about 25% of the current global demand.