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Murowa Diamond Mine

Lovemore Zigara, Midlands Correspondent
RioZim Group Limited subsidiary, Murowa Diamonds mine, has reportedly slashed salaries and allowances for its workforce as part of a raft of measures to remain viable owing to the plummeting diamond prices on the international market.

The locally-listed concern took over the mine after United Kingdom-based Rio Tinto left the country when it relinquished its stake in Murowa and Sengwa Coal Mines.

Murowa Diamonds mine spokesperson, Lovemore Chimuka, told Business Chronicle that the company had streamlined operations as part of cost cutting measures.

“Like any other mining business, when commodity prices fall you initiate survival strategies which usually are along cutting costs, streamlining and make sure you still get value from those falling prices.

We’re, however, confident as a mine that the prices will rebound.

“We’ve streamlined in cases where we had high expenditure and we went further to cut salaries and allowances, a development where we had input from our employees,” he said.

However, Chimuka could not shed light on the extent of the salary and allowances cuts.

The mine has also terminated contracts for contractors who had a load and haul arrangement at the only operating kimberlitic operation in the country following the purchase of mining equipment worth $6 million.

The contract terminations are part of the rationalisation and streamlining process.

Murowa’s $6 million equipment is part of the $60 million cash injection the new shareholders will commit in the next four years as RioZim seeks to expand operations at the Zvishavane-based mine.

With the fall of diamond prices, the mine recorded a loss of $573, 000 in the half year to June 2015.

A survey on the state of the mining sector in the country done by the Chamber of Mines recently shows that diamond revenue fell by 46 percent following a 30 percent decrease in output.

On the regional front, the softening of the price of the gems has resulted in the world biggest diamond producer, De Beers and Botswana’s Okavango Diamond Company sales falling by over 20 percent last year, a development which pushed the Botswana government to cut the 2015 economic growth target for last year by half.