Govt Scraps Export Tax After Rio Tinto’s Murowa Diamonds Threatens to Close

The Zimbabwe government has been forced to scrap a punitive 15 percent tax on unprocessed mineral exports after London Stock Exchange-listed Rio Tinto threatened to close it’s Murowa diamond mine in Zvishavane.
Midlands Senator Lilian Timveos asked deputy mines and mining development, Fred Moyo to explain the new government position in the Senate recently.
SENATOR TIMVEOS:
My question is directed to the Deputy Minister of Mines and Mining Development. Murowa Diamonds has terminated contracts of most of their companies that were contracted there and over 250 people have lost their jobs. What is your Ministry doing about the problems that are now being faced by these miners who have lost their jobs?
THE DEPUTY MINISTER OF MINES AND MINING
DEVELOPMENT (MR. F. MOYO):
Thank you Madam President. Yes, we had a problem regarding Murowa Diamond Mines which faced three challenges recently. The first one was the one that Government was debating regarding the 15% tax on diamonds being exported unbeneficiated. The second was discussions we were having with them
regarding ground rental which attracts a tax that must be paid to Government. The third issue was that the current mining contracts hadcome to the end of the tenure, so they had to be renewed and their renewal protocols are such that they have to terminate the current contractors, remove them from site and then re-advertise the same contracts so that fresh bidders can come through and bid for the mining work that has to be done by contract companies. The tax issue of 15% has been resolved and the ground rental issue is receiving at
tention. The bidding for contracts, I believe has been done and the interested
contractors have been shortlisted. Final stages of selection of the final
contractor, I believe is in process. This is a company issue and so, I
cannot be specific there but the Hon. Senator will find that, once the
contract to mine is awarded to the winning bidder, the work should start
again and the mine should operate as normal. The mine could not
remain with sub-contractors when in fact the main contract had been
terminated. So, that is what led to the removal of sub-contractors from
the mine. So, things should be going back to normal in the next couple of weeks.”
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