RioZim in the red
….as the resources firm’s loss widens
LIVINGSTONE MARUFU
RioZim Limited, a publicly traded resource company, is in dire straits after suffering a wider loss in the six months to June 30 2024 to ZWG165.71m from ZWG110.48m reported in the prior comparative period, Business Times can report.
Saleem Beebeejaun, board chairman, said the widened loss was largely due to lower gold production and rising cost of production, which were fuelled by volatile exchange rates.
“The operating environment was turbulent during the six month period and presented a mix of challenges to the group. From the beginning of the year, exchange rates were volatile which caused price inflation on raw materials and various inputs required for production. This had a huge bearing on the group as cost of production continued to soar,” Beebeejaun said.
He said rolling power cuts exacerbated the situation.
“Power supply challenges remained a threat to the group, however the alternative power supply arrangements put in place went a long way in improving power supply across the group’s mines,” Beebeejaun said.
He said gold prices were favourable and maintained a positive trajectory throughout the period under review.
“The group recorded a 27% decline in gold production for the six month period to 306 kilogrammes [kg] from 417kg achieved in the same period in the prior year. The low production was attributed mainly to Cam & Motor mine operating sub optimally due to low plant throughput and depressed recoveries. These were brought about by mining and ore supply challenges to the plant due to lagging pit development. Renco mine also recorded lower gold production due to inconsistent plant performance. The gold price averaged US$2 165/oz which was 13% in the positive from US$1 910/oz recorded in the comparative period,” he said.
Revenue for the period was ZWG282.5m, a 20% decline from ZWG352.4m recorded in the same period in the prior year. The favourable gold prices to some extent cushioned the group from the effects of lower production.
Additionally, RioZim’s balance sheet shrunk to ZWG1.666bn in the reviewed period from ZWG1.688bn reported in the same period in 2023.
The base metals refinery remained under care and maintenance during the period while the chrome business commenced mining activities with its private partnerships at its Darwendale claims after an amicable resolution was reached on the dispute that
surrounded those claims.
Beebeejaun said production for the period at the Company’s associate RZM Murowa (Private) Limited marginally increased by 2% to 216 000 carats compared to 212 000 carats recorded in the comparative period in 2023.
“The increase in production was a result of improvement in the grades from the stock piles which the mine is currently processing. Mining activities from the pits remained suspended during the period. The mine is currently engaged in extensive exploration activities targeted at
extending the life of its pits which will pave the way for the resumption of mining activities in the pits. Despite an increase in diamond production, Murowa recorded a decline in revenue and profitability due to a continued decline in diamond prices. Consequently, the share of profit from the associate declined to ZWG 5.6m from ZWG12.8m recorded in the comparative period,” he said.
Beebeejaun said there has been no progress on the business’s energy projects, which include the Sengwa Project and the 178MW Solar Project, as both are now at funding stage and the company continues engagements with various stakeholders for a potential funding arrangement.