RioZim buys Lüderitz diamond mine

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RioZim buys Lüderitz diamond mine

RioZim, the company that separated from Rio Tinto plc in 2004 to become a wholly owned Zimbabwean company, has reportedly purchased the Sperrgebiet Diamond Mine (SDM) which holds a combination of four onshore and offshore diamond mining licences in the restricted diamond areas around Lüderitz. SDM’s mainland-based operation is situated at Elizabeth Bay, about 40km south of Lüderitz. 

It is believed RioZim, one of the biggest gold producers in Zimbabwe, paid more than N$1 billion for the diamond mine, although the purchase price has not been officially revealed. 

RioZim was initially incorporated in August 1956 as Rio Tinto Southern Rhodesia Ltd. It was initially established to develop and mine Zimbabwe’s Empress Nickel deposit, which was the first mining operation to be set up outside Europe by Rio Tinto plc. Today, RioZim produces gold, coal, nickel and copper. The company is listed on the Zimbabwe Stock Exchange (ZSE). 

Yesterday, reports surfaced from various business publications that RioZim bought Sperrgebiet DM in Namibia as the Zimbabwean group seeks to expand in Africa as it aims to diversify its assets and geographies.

“The group has been trying to broaden its footprint in the mining industry in Africa and this acquisition was part of the strategy,” Tawanda Andrew Chiurayi, RioZim’s group company secretary, told Bloomberg News. 

Bloomberg further reported that RioZim is planning further investments in base and precious metals in Zimbabwe, after spending more than US$150 million at its gold mine and a new plant at the Murowa diamond mine, Chiurayi said. 

During June this year, Sperrgebiet Diamond Mining (Pty) confirmed a majority equity investment by Global Emerging Markets Group (GEM). Among other investments, the resources division of the GEM Group holds mining and energy assets in Zimbabwe and has previously expressed a desire to expand its footprint in southern Africa and the rest of Africa in the longer-term. 

GEM’s current African investments include a majority shareholding in
RioZim. The company also owns a base metal refinery and an energy business unit focused on generating green energy and minimising the carbon
footprint of its mining

SDM actually acquired its mining assets from Namdeb Diamond Corporation in October 2020 and invested in the project through an environmental clean-up campaign and the care and maintenance of the existing main processing plant with the aim to recommission it. At the time, an additional capital investment was solicited by shareholders, culminating into a share sale transaction between the Namibian shareholders and its minority partners. 

“The equity transaction was well received by the government of Namibia and received approval from the Namibian Competition Commission and the minister of mines and energy. The deal was finalised on May 20, 2022, with GEM group subsidiary obtaining 78% of the shareholding and Namibian
shareholders retaining 22% inclusive of an Employees Trust of 2%,” read a statement from SDM.

Meanwhile, the company was gearing up to start operations at the historic production levels under Namdeb during the fourth quarter of 2022. 

“The immediate next aim is to double production by mid-2023 by implementing an infield pre-treatment facility as the second phase. The company is amidst an aggressive recruitment drive, aiming to employ up to 180 people by the end of 2022, with a further increase during phase two,” SDM stated. All efforts to get comment from SDM were unanswered at the time of going to print.