Zimbabwean Indigenization Minister Saviour Kasukuwere says Murowa Diamonds, a local subsidiary of the Anglo-Australian mining giant Rio Tinto, has agreed to put a 51 percent stake in the unit in black hands to comply with an economic empowerment law.
Kasukuwere told the state-controlled Herald newspaper that Murowa has formally notified his ministry of its intentions to cede the shares. The minister did not give further details on how the shares will be transferred or how Rio Tinto will be compensated.
Murowa management could not immediately be reached for comment.
The Rio Tinto Group holds a 78 percent interest in Murowa Diamonds. The other 22 percent is owned by Rio Zimbabwe Limited, listed on the Zimbabwe Stock Exchange.
The mine produced 139,000 carats of rough diamonds in 2010.
It was unclear if Rio Tinto now intends to follow through on its earlier proposed investment of US$200 million to boost Murowa’s production.
Economist Daniel Ndlela said the black economic empowerment program is crippling foreign-owned firms. “Beneficiaries of these shares should pay for the equity stakes because most foreign-owned firms need capital to boost production,” he said.
Political analyst Roderick Fayayo said Rio Tinto probably ceded shares under duress. "We believe that Murowa Diamonds is not willingly parting with these shares as government is well-known for grabbing property owned by whites,” he said.
Murowa Diamonds received a Zimbabwe National Chamber of Commerce award in 2010 for community projects with a special focus on employee welfare and HIV/AIDS.