AT least three global resources giants are said to have expressed interest in Rio Tinto Plc's multimillion dollar Zimbabwean gem extraction operation, Murowa Diamonds, after the world's third largest mining and exploration firm announced last year that it planned to offload the business.
Rio Tinto, which trades its stock on the London and Australian stock exchanges, controls 78 percent shareholding in Murowa, an asset that produces over 300 000 carats per annum, while the Zimbabwe Stock Exchange-listed RioZim Limited controls the remainder.
"Three companies have expressed interest in the mine," a source close to both Murowa and Rio Tinto said this week.
"One of the companies was here (recently), carrying out due diligence processes. Others are still working on that," the source said.
Murowa management had also expressed interest in purchasing shareholding in the diamond mining firm but it was not clear if they would be able to secure funding.
But given the demands of the country's tough empowerment laws, management was likely to be roped in by potential suitors.
Government has been championing controversial polices that have seen foreign investors releasing at least 51 percent shareholding in local companies to indigenous business people.
The empowerment programme reached its climax recently when Impala Platinum's Zimbabwean operating unit, Zimplats Holdings Limited, transferred controlling shareholding to locals.
Zimplats is the country's largest mining firm, which employs over 9 000 workers.
Rio Tinto had indicated that it planned to leave the diamond industry in March 2012, effectively inviting bids for its gem assets, including two other operations in Canada and Australia, worth about US$1,2 billion.
It was not possible to establish the names of the firms gunning for Murowa this week.
However, the sources said they were all global resources operations with significant financial muscle.
Over a week ago, one of the firms was scouring through Murowa's books but the outcome of the discussions was closely guarded.
This newspaper could not establish if RioZim, which said in May it was ready to exercise its pre-emptive rights in Murowa, was among the front runners.
RioZim, which was created in 2004 following the exit of Rio Tinto, had opened talks with Rio Tinto to take over the 78 percent.
However, RioZim has spent the better part of the past 12 months battling to clear a US$50 million debt owed to local banks, and it badly needs to recapitalise its gold mines and develop its substantial coal and chrome concessions.
RioZim was keen to exercise its pre-emptive rights to acquire Rio Tinto's shares in Murowa, Harpal Randhawa, whose private equity group Global Emerging Markets (GEM) recently bought 25 percent of RioZim, was quoted as saying in May last year.
"We are now in discussions with Rio Tinto Plc to acquire the 78 percent of Murowa that they want to offload," the GEM official was quoted saying at an investment conference in Harare.