TAURAI MANGUDHLA
Zimbabwe Stock Exchange listed miner RioZim Limited (RioZim) is considering weaning off its operations completely from the country’s national power grid as part of efforts to avoid energy constraints that have interrupted production.
Erratic power supplies, that forced the extractive industry to import
electricity directly from the country’s neighbours, hampered RioZim’s
operations and forced it to invest in diesel generators and solar plants to
augment electricity.
Now, the miner has a plan which will eventually see it become selfreliant, chairman Saleem Beebeejuan said in the company’s full year results
for the period to December 2019.
He said power supply deficit remained a key risk across the group’s
operations in spite of the slight improvement in the power supply in
Q1 2020.
“To mitigate this risk, the company has invested in generators that will be
commissioned at Dalny and Renco Mines” Beebeejuan said, adding
these generators are expected to fully complement power from the power
utility by the end of Q2 2020.
“In the long term, through its solar projects the group is expected
to be fully independent of the power utility.”
This comes after RioZim’s group’s gold production performance
declined by 7% to 1 658 kg against the prior year’s production of 1 792
kg largely as a result of incessant power cuts of up to 18 hours per day,
which hampered production at all of the group’s mines from the second
quarter of 2019.
The company’s Murowa Diamonds also recorded a 7% regression in
production to 685 000 carats of diamonds from 740 244 carats produced in the comparative period in 2018.
“The low production was attributed to intermittent power supply which
resulted in lost production running time,” Beebeejuan said.
In addition to the power cuts, the group also suffered from breakdowns
on the mills section at its Cam & Motor plant, resulting in revenue
for the year being subdued at ZWL$577.1m.
RioZim’s Renco Mine in Masvingo produced 556kgs of gold in 2019 which is 6% lower than the comparative period production of 591kgs mainly as a result of inconsistent power supply to the Mine which significantly reduced
plant running time and throughput.
Dalny Mine, RioZim said, experienced the worst power cuts losing up to 18 hours per day from Q2 2019. As a result, production at Dalny regressed by 18% to 364kg from 442kg recorded in the same period in 2018.The mine carried out vigorous exploration within the Dalny Mining Complex and
successfully opened new mining pits with higher grades, which lessened
the effect of low throughput due to power cuts.
Cam & Motor Mine production fell 3% to 738kg due to persistent mill
breakdowns during the year which forced the mine to carry out major
overhaul repairs including reworking the foundations of the mills in the
second half of the year.
RioZim has re-embarked on the US$17m capital project to construct
the BIOX plant at Cam and Motor during Q4 2019, which had been
earlier stalled due to lack of funds.
The use of the BIOX technology is expected to increase production
by at least 50%. Civil works for the project have progressed to 30% as at
reporting date.
Meanwhile, the company’s principal shareholders and their affiliates have funded the resources group to the extent of US$11m in the form of foreign currency loans which they are willing to convert to equity and bring further capital but are constrained by unavailability of sufficient authorised share capital.
The group continues to seek engagement with Old Mutual while factoring in the effects of this delay on the company.
Giving an update on energy projects, Beebeejuan said his company
remained focused on implementing its various power projects to
guarantee stable power supply to the group’s operations and supplement
the national power supply deficits, the two major projects being the 178MW
solar project and the Sengwa thermal power station.
Although the operating and economic environment has been very
challenging making it difficult to attract long term funding and foreign
direct investments into the country, RioZim remains hopeful of reaching
financial closure in the near future on its solar project. Meanwhile ZERA
has issued licenses for the first phase of 75 MW.
On the 2 800 MW Sengwa Power Station, Beebeejuan said RioZim in
2019 focused on completing all the regulatory approvals and obtaining
the necessary prerequisites for the project.
“These activities include completion of a power demand
analysis study of the region by the EPC Partner, renewal of the
grid impact study, developing of a conceptual study for the Sengwa
town and commissioning of the Environmental Impact Assessment,”
RioZim chair said.
