Rio Tinto may reconsider investment in Zimbabwe

Rio Tinto may reconsider investment in Zimbabwe

Awaits the implementation of the Bill

According to Antwerp Facets News Service, Rio Tinto which had earlier planned to withdraw its investments in a new project in Zimbabwe, says that it may reconsider the U.S. $60 million investment, provided the Mugabe government implements its Indigenization and Economic Empowerment Bill. The Bill now awaits the signature of the President Robert Mugabe, although it has been approved by the Zimababwian Legislation. The Bill states that all foreign owned companies would have to inclulde a local as a majority shareholder. Rio Tinto holds 56 percent of Rio Tinto Zimbabwe, which owns and operates the Murowa diamond mine.

The Zimbabwe parliament is also considering the Mines and Minerals Amendment Bill, which will authorise the government to purchase 51 percent staked in foreign companies’ holding in local mines, which produce ‘strategic fuels and minerals’. Up to 25 percent of the 51 percent could be taken without money changing hands, and the remaining would be paid under a five-year plan.

Rio Tinto has also expressed concern about Zimbabwe’s foreign exchange regulations, which requires mining companies to source foreign exchange at the official rate, which currently is Zim. $30 000 to one U.S. dollar, reported AFNS. The rate available on the open market is more than Zim. $2 million to one U.S. dollar.

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