New Zimbabwe Tax to Adversely Affect Rio Tinto Mine

Rapaport reported that Zimbabwe’s new taxation regime will have a significant impact on the business of Rio Tinto plc (ASX:RIO,LSE:RIO,NYSE:RIO).

As quoted in the market news:

A source familiar with the matter added that the land lease alone, if implemented, could cost the company around $109 million a year.  Deutsche Bank valued the mine at only $279 million in 2013.

Murowa is Rio Tinto’s only diamond mine in the country and it produced 101,000  carats of gems in the fourth quarter of 2014.

Zebra Kasete, managing director of the Murowa diamond mine, stated:

The management team is continuously engaging the government and hope for some positive outcome from this process; or else the viability of Murowa Diamonds as a going concern will be impacted.

Click here for the full Rapaport report