October 27, 2010 / 5:11 PM / 9 years ago

Rio's Zimbabwe unit sees higher diamond output in 2010

HARARE (Reuters) - Global miner Rio Tinto’s Zimbabwe unit expects a rise in diamond output this year from 124,000 carats produced in 2009, its managing director said on Wednesday, but production will be flat in 2011.

A employee is seen at Rio Tinto Limited Shanghai Representative Office in Shanghai January 12, 2010. REUTERS/Aly Song

The unit, Murowa, is 78 percent owned by Rio Tinto, while RioZim Limited — a wholly Zimbabwean-owned unit that spun off from Rio Tinto in 2004 — controls the remainder.

“(There will be an) increase over last year following a small plant upgrade to handle harder ore completed towards the end of 2009,” Murowa managing director Neils Kristensen said in an emailed response to questions from Reuters.

He did not give details on how much the company expects output to rise.

Output at the mine was up at 85,939 carats during the first six months of this year, compared with 67,000 carats in the same period in 2009.

Kristensen said there will be “no significant changes” in output in 2011.

Murowa, with a design capacity of 300,000 carats, suffered a $5 million loss during the first half of this year due to lower gem grades and a ban on diamond sales by the government.

Zimbabwe had banned all diamond exports until stones from the government’s controversial Marange fields, where it now operates three joint venture mines, were certified by industry regulators.

Certification includes ensuring there have been no human rights violations in the diamond trade.

Kristensen said Murowa resumed diamond exports at the end of August, after the government sold its first batch of certified Marange diamonds.

He said a feasibility study to increase output to 1.8 million carats was still underway.

Kristensen also said the company was still waiting for regulations that would determine the quantity of shares mining firms should transfer to locals under a government empowerment drive.

The government early this year published rules forcing foreign-owned firms, including mines and banks, to cede 51 percent of shares to blacks but has since set up committees to recommend ownership levels for different economic sectors.

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