The Sunday News
Roberta Katunga Senior Business Reporter
DIAMOND producer Murowa Diamond Mine in Mazvihwa in Zvishavane is set to resume full-scale mining operations and exporting the mineral after Government agreed to defer the imposition of a 15 percent export tax on un-beneficiated diamonds for the mine, an official confirmed. In January, international conglomerate Rio Tinto Group which holds a 78 percent stake in Murowa, announced the possible closure of the mine citing the regime of taxes announced by the Government.
It had also closed one of its plants and reduced production pending the decision. In 2013 Government proposed a 15 percent tax on unrefined mineral exports as a measure to push mining companies to beneficiate minerals locally. The tax was later implemented in January and is already applicable to platinum miners.
However, in an interview, Murowa Diamond manager communication and external relations Mr Lovemore Chimuka said the mining concern received written confirmation from the Government that the application of the proposed 15 percent export tax on un-beneficiated diamonds had been deferred until further notice.
“We are very satisfied with this decision and with that of allowing the 15 percent royalty as a tax deductible item,” said Mr Chimuka.
Mr Chimuka said the diamond miner had also engaged Government on ground rental fees.
“We have also engaged constructively with the Government on the critical question of the ground rental fees and we are confident that these questions are being considered very seriously and will be resolved very shortly. On this basis, we have decided we will resume exporting Murowa diamonds and are planning for the resumption of mining operations as soon as practically possible,” he said.
Land rental for diamond mines is about $3 000 per hectare (2,71 acres) and Murowa owns more than 30 000 hectares, costing the company about $109 million a year, a person familiar with the situation said, asking not to be identified as he is not authorised to speak to the Press.
Mr Chimuka said Murowa and Rio Tinto would continue to work closely with the Government.
Last year, Murowa paid a total of $14 million in taxes and royalties to the Government.
Meanwhile, diamond output at the mine for the first quarter this year declined by 61 percent, a development Rio Tinto attributed to a plant shutdown and reduced production due to confusion on the 15 percent export tax on unrefined mineral exports.
Murowa Mine is a combined open pit and underground construction, and estimates put construction costs at $61m and mine reserves are 19 million tonnes of ore. RioZim, a former subsidiary of Rio Tinto, owns the remaining 22 percent in Murowa Diamond mine.
