Murowa diamonds have appealed to legislators to repeal a statutory instrument on ground rentals which the company claims is dispelling investment.
The mining giant, owned by Rio Zim, claims the law provides for unreasonable ground taxes to be levied on their operations making it difficult for miners to break even.
“The Mines and Minerals Act (chapter 21:05) also has no provision that allows ground rental fees to be levied on mining companies. As it stands there is a charge of $3 000 per hectare levied on miners,” said Rio Zim chief executive officer Bhekinkosi Nkomo.
“Given that diamonds are a rare occurrence, it requires that players by nature to have bigger grounds to be able to successfully explore and discover diamonds and at a rate of $3 000 per hectare it just makes diamond mining unviable,” he added.
“We are aware that the committee on Mines actually had considered the issue and offered some recommendations. We are hoping that the issue will be taken forward.
“We are aware that a new statutory instrument which had pegged ground rentals at $225 was repealed leaving us with old one which pegs at $3 000. Our recommendation is that we repeal the SI ground rentals to make this industry competitive and also attract investment.”
According to Nkomo, in 2016, the mine produced 475 000 carats up from 255 000 carats in 2015.
He was presenting evidence before the Parliamentary Portfolio Committee on Mines this Monday. Apart from the ground levy, the Murowa delegation also complained against indigenisation being applied to diamond and platinum.
Nkomo also reported that the mine needs at least $125 million as capital for operations for the next three years. The investment will increase production to over one million carats per annum.