Zimbabwe to Consolidate Diamond Mines into One Company

Reuters reported that Zimbabwe plans to merge all the diamond mining companies in the country into one large firm that will be half owned by the state. That firm will include a local Rio Tinto plc (LSE:RIO,ASX:RIO,NYSE:RIO) unit.

As quoted in the market news:

President Robert Mugabe’s government is pursuing a black economic empowerment programme, known locally as indigenisation, that requires foreign-owned companies, including mines, to sell 51 percent of their shares to black Zimbabweans.

The government had previously said it wanted to merge some of the diamond companies operating in the Marange area to the east of the southern African country, in which it already owns half the shares, to enhance transparency.

But mines Minister Walter Chidhakwa told a committee of parliament that all the mines would be merged, including Rio Tinto’s Murowa diamond mine in south-central Zimbabwe.

Chidhakwa commented:

We are very clear, this is a regulatory matter and we have said to them the only way you can participate in diamond mining in Zimbabwe is by being in this company.

Click here to read the full Reuters report.