Sunday, October 21, 2012

Murowa Diamonds output up 64 percent

production at Zvishavane-based Murowa Diamonds, which is majority owned by Rio Tinto International, jumped 64 per­cent to 92 000 carats in the three months to September from a quarter earlier, the interna­tional mining giant said.
The 92 000 carats are diamonds attributa­ble to Rio Tinto’s 77,8 percent stake in the mine.
The latest figures hint to a recovery in pro­duction, especially after drop in production to 66 000 carats that was realised in the sec­ond quarter.
Statistics from Rio Tinto International’s third quarter 2012 operations review pub­lished last week show that Murowa’s produc­tion in the first nine months of the year rose by 8,5 percent to 215 000 carats from 198 000 carats in the same period a year ago.
Also, ore processed in the quarter under review increased 18,3 percent to 142 000 tonnes from 120 000 tonnes a quarter earlier, while ore processed in the nine months to
September rose to 388 000 tonnes from 339 000 tonnes recorded in the same period in 2011, representing a 14,5 percent increase.
However, diamonds recovered in the third quarter from the mine climbed 63 percent from 73 000 carats in the second quarter to 119 000 carats. In the period from January to September, recoveries grew 9 percent from last year to 277 000 carats.
The fate of Murowa Diamonds is not clear. Its parent, Rio Tinto International, which became the world’s second largest miner last week with a market capitalisation of $98,7 billion, hinted earlier in the year that it might be forced to realign its ownership structure particularly for its diamond businesses.
“We regularly review our businesses in order to ensure that they remain aligned with Rio Tinto’s strategy of operating large, long-life expandable assets.
“The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply.
“We have a valuable, high quality dia­monds business, but given its scale we are reviewing whether we can create more value through a different ownership structure,” said the company’s chief executive for Diamonds and Minerals, Harry Kenyon-Slaney, in March this year.
Government is also pushing for locals to assume the majority shareholding in mining companies in order to address the historic imbalance where natives were sidelined from mainstream economic activity.

The Indigenisation and Economic Empowerment Act, which was signed into law on March 9 2008, stipulates that previ­ously disadvantaged blacks should assume 51 percent equity in foreign businesses.
Murowa Diamonds started operations in 2004 after feasibility studies and mine plan­ning conducted between 1998 and 2000. The miner now employs about 180 people.

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