Rio Tinto to Suspend Investment in Zimbabwe

Owing to the political situation in Zimbabwe, Rio Tinto will not expand its Murowa mine in the country until conditions improve, Rio Tinto Diamonds General Manager Jean-Marc Liberherr said.

The diversified mining group is currently suspending investment in Zimbabwe, for “some very obvious reasons,” Liberherr said to Bloomberg, and won’t spend the money to expand the mine “until the situation stabilizes.” However, the group has no plans to withdraw completely from the country. “We believe in the mine, and we need the goods,” he said.

Zimbabwean President Robert Mugabe was recently re-elected and sworn in, for the sixth time, following a run-off election in which he was the only candidate.

Murowa is Zimbabwe’s only diamond mine and in 2007 produced approximately 145,000 carats, a 40 percent decline over the previous year, attributed to frequent power outages, equipment failures and a delayed expansion program.

Another mining company operating in Zimbabwe is Anglo American, which has faced criticism for a proposed $400 million investment in Zimbabwe in the form of a platinum mine.