Rio's Zimbabwe Diamond Unit Gets Part OK For Indigenization Plan

Rio Tinto PLC's (RIO) Murowa diamond mine in southwest Zimbabwe has received partial approval for its plans to meet government requirements to transfer a majority stake in local assets to black investors in the African country, a spokeswoman said Thursday.

The part approval of the "indigenization" plan relates to a community equity component of the proposal and the spokeswoman said the mine will continue to hold discussions with the government.

Mining companies were earlier this year given until the end of September to sell at least 51% stakes in local operations. Several companies have recently said they received letters calling for them to resubmit their plans.

South Africa's Impala Platinum Holdings Ltd. (IMP.JO) last month said indigenization plans submitted by its Mimosa joint venture with Aquarius Platinum Ltd. (AQP.AU) and majority owned Zimplats Holdings Ltd. (ZIM.AU) had been rejected by Zimbabwe's minister of youth development, indigenization and empowerment.

The government of Zimbabwe in 2007 published the Indigenization and Economic Empowerment Act. The indigenization minister in March set out requirements for implementing the act, defining the empowerment quota as a controlling or 51% of shares that had to be sold to the government, a sovereign wealth fund or an employee ownership scheme. The value of the interest was to be agreed by the minister and the company, although no indication has been given how it might be paid for.

The Murowa open-pit diamond mine near Zvishavane is 78% owned by Rio and 22% by Zimbabwe's Riozim Ltd. (RIOZIM.ZB).

-By Robb M. Stewart, Dow Jones Newswires; [phone]; [e-mail]