TINASHE MAKICHI
Listed resources firm RioZim’s production in the quarter to September 30,2021 fell 7% owing to crippling power cuts, Business Times can report.
“…The company suffered considerable downtime, which negatively affected production and increased costs significantly. The group currently produces at a loss due to the foreign exchange and power situation,” Company secretary Tawanda Chiurayi said.
He said the volatile operating environment also worsened in the reviewed period with a marked weakening of the local currency as exchange rates skyrocketed in the alternative market.
This resulted in prices of inputs rocketing as they tend to track rates in the parallel market. The auction rate, however, remained stagnant throughout the period which further widened the gap with the alternative market rates.
The group gave approximately 55% of its gross revenue to either the Reserve Bank of Zimbabwe or other agencies of the government in the form of surrender of foreign exchange, royalties, taxes, duties and utilities.
Chiurayi said the Zimbabwe dollar thus received, at the official exchange rate, had a purchasing power of almost half of what the company receives.
That means that the company carries an additional cost of approximately 25% of revenue which comes from the current environment. In effect the company loses about 25% of its revenue altogether.
He said Cam & Motor Mine processed low grade ores from its One Step Mine throughout the quarter.
The grade of the ores at One Step sadly, continued to be depressed below planned grades.
The Mine’s production, therefore, declined by 31% from the same period last year.
BIOX Plant Project Structural steel fabrications and equipment installations progressed during the quarter with most of the activities necessary to bring the plant to commissioning at an advanced stage.
The group is looking forward to commissioning the project at the end of the fourth quarter of this year, notwithstanding the disruptions encountered on installations, mainly from power cuts and slow movement of cargo due to the cross border challenges.At Dalny Mine, production for the quarter grew by 31% compared to the same period in the prior year.
The growth in volumes was due to increased throughput as a result of plant process interventions that were implemented from the beginning of the current year.
The Mine also opened new open pit mining areas during the year which contributed to a positive upturn in ore availability and throughput.
There was a marginal 1% increase in production at Renco Mine during the period under review.
The consistent production was due to stable ore grades as the accelerated exploration activities which the Mine undertook from the prior year continued to give the Mine more control on its feed grades.
On the base metals business, The Empress Nickel Refinery remained under care and maintenance throughout the quarter.
Its associate, Murowa Diamonds, reported a 43% decrease in production compared to the third quarter.
The low diamond production was as a result of processing low grade ores from the K1 pit after the high grade K2 pit reached pit life.
The associate’s Crown Jewel Project which will increase the processing capacity of the plant is progressing albeit at a slower pace than desired due to lack of adequate foreign currency.
