RioZim broadens power financing options
LIVINGSTONE MARUFU
Listed miner RioZim, which has been hit by crippling power cuts, has cast the net wider on financial options to woo investors on its two major projects amid indications that power outages are adversely impacting on production across all its mining operations.
In a 2021 annual report, RioZim chairman Saleem Beebeejaun said the ongoing power supply deficits and policy changes are among other challenges, which negatively impacted the operations of the group.
“The company has put up various financing options on 2800MW Sengwa Power Station to attract potential investors into the project due to a mix of considerations brought about by the Covid-19 pandemic. Stakeholders will be kept abreast of the developments of the project,” Beebeejaun said in an annual report released this week.
“On 178 megawatt MW solar project, the company concluded the Environmental Impact Assessments (EIAs) for all the proposed solar sites which are a prerequisite before the implementation of the solar projects at the various mines.
“Engagements with potential financiers are ongoing albeit at a slower pace due to the complexities brought about by the Covid-19 pandemic.”
Power cuts have been hitting the company hard with the resources group saying it was losing 30% of its production time.
“Power supply challenges worsened during the quarter due to acute load shedding as the country battled with erratic local power generation coupled with inadequate supplementary power imports. Production was, therefore, significantly hampered during the quarter due to power supply challenges. Power outages are taking up to 30% of the available production time hence adversely affecting production in a very material way,” company secretary Tawanda Chiurayi said in a statement accompanying the miner’s trading update for the quarter ended September 30.
Consequently, gold production at Renco Mine plunged 15% while Renco output slid 6% in the quarter to September 30, 2022.
Dalny mine was placed under full care and maintenance due to inadequate foreign currency as it requires a huge capital investment to resuscitate underground operations.
“Power supply challenges, inadequate foreign currency and lack of production at Dalny mine resulted in a 6% decline in gold production for the group compared to the same period last year.
“Power and access to foreign currency earnings are critical to the needs of the company. Both of these continue to be extremely scarce,” Chiurayi said.
He indicated that RioZim invested heavily in diesel generators which required foreign currency and power generated by diesel costs is largely higher than normal power.
