One of Zimbabwe’s largest gold miners, RioZim, says it will engage the Reserve Bank of Zimbabwe (RBZ) to increase the company’s foreign currency retention threshold to meet its operational expenditure requirements.
RioZim operates three gold mines—Cam and Motor in Kadoma, Renco in Masvingo and Dalny Mine in Chegutu.
It also operates RioZim Energy, which is developing a 2 000 megawatts power plant in Sengwa, Gokwe North, RioBase Metal which comprises Nickel Refinery and Murowa Diamonds, in Zvishavane.
Company secretary, Per Chiurayi said the central bank‘s decision to cut back the retention level for exports to 60% from 70% has adversely impacted the company’s performance but hopeful the issue could be resolved expeditiously.
“Engagements with the central bank will continue for an upward review of the company’s foreign currency retention in order for the company to meet its operational requirements and successfully deliver its BIOX Plant in the set timelines,” Chiurayi said.
The RBZ retention threshold, coupled with the adverse impacts of Covid-19 pandemic, significantly contributed to the 10% decline in gold production in the quarter of 2021compared to the prior comparative period, the resources group said.
Government recently announced more incentives for exporters whereby gold producers that deliver gold quantities above their average monthly deliveries would be entitled to a retention level of 80% on the incremental portion of gold delivered to Fidelity Printers and Refiners.
Rio Zim’s Cam and Motor mine obtained lower than expected ore grades at One-Step Mine. The ore is hauled to Cam and Motor Mine for processing.
This was coupled with low throughput as a result of persistent plant breakdowns which were caused by the incessant heavy rains during the period.
Cam and Motor gold production fell by 12% in comparison to the first quarter of 2020.
Chiurayi said civil works for the Biological Oxidation (BIOX) Project were completed during the quarter and installations are currently underway.
The company’s efforts to fast track the completion of this project were dampened due to inadequate forex.
RioZim, however, is optimistic that it will reach financial closure with a potential financier to enable the commissioning of the BIOX Project within the planned timelines.
The wet conditions from the current year’s persistent rains affected mining volumes at the Dalny mine’s open pits.
As a result, throughput at the plant was significantly reduced and the Mine recorded a 20% decline in gold volumes compared to the same period in 2020.
Renco mine suffered from inconsistent power supply due to rain induced power infrastructure failures which led to a 4% decline in the gold produced compared to the same period in the prior year.
The mine has engaged ZETDC on the rehabilitation and upgrading of the Renco power lines.
The Empress Nickel Refinery remained under care and maintenance throughout the quarter, it said.
Diamond production at the group’s associate Murowa Diamond Mine was predominantly from the low grade K2 pits which resulted in subdued carats produced.
This led to production slump 20% compared to the prior comparative period.
Murowa was focused on its plant capacitation project which will enable it to increase carats production through a ‘high volume low grade strategy’.
Progress on the project is, however, hampered by foreign currency challenges, RioZim said.
RioZim said the group remains exposed to the risk of metal price volatility as seen with the gold price taking a dip for a short period at the end of the quarter.