DeBeers eyes Rio Tinto’s stake in Murowa diamond mine

DeBeers, a subsidiary of diversified miner Anglo American, is planning to buy Rio Tinto's a majority stake in Murowa diamond mine, the Zimbabwe's Independent newspaper today reported.

Apart from DeBeers, seven potential suitors were eyeing a full takeover or buying Rio Tinto's stake in the Murowa diamond mine, the report said.

The Murowa diamond mine, located near Zvishavane in South Central Zimbabwe, is run by Murowa Diamonds Private Limited, which is 78-per cent owned by Rio Tinto with the remaining 22-per cent owned by Riozim Ltd, an independent Zimbabwean company.

Started in 2004, the open-pit Murowa mine produces about 250,000 carats per annum through its processing plant. Current estimates put the mine reserves at 19 million tonnes of ore, with an ore grade of 0.9 carats (180 mg) per tonne.

At a planned production of 500 000 tonnes per year, the mine could produce 450 000 carats per year. Last year, the mine produced 139,000 carats of rough diamonds.

London-based Rio Tinto had last year signaled its intention to exit the diamond business and has since been exploring a sale of its three mines in Australia, Canada and Zimbabwe. It also has an advanced diamond project in Madhya Pradesh in India. (See: Rio Tinto to exit diamond business)