RioZim teeters on the brink
…as workers, creditors and regulators push for receivership
CLOUDINE MATOLA
A deepening crisis has engulfed Zimbabwe Stock Exchange-listed RioZim Limited, with the once-prominent mining conglomerate now facing possible receivership or court-mandated corporate rescue proceedings.
This follows a High Court application filed on April 28, 2025, by the Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU), alongside two other parties.
The application seeks to place RioZim under court-led administration in terms of Part XXIII of the Insolvency Act [Chapter 6:07], citing the company’s chronic financial distress—marked by unpaid salaries, mounting tax arrears, and ballooning debts to key service providers.
According to court documents seen by Business Times, a market leader in business, financial and economic reportage, ZDAMWU has nominated prominent legal practitioners Wilson Manase and Knowledge Hofisi as corporate rescue practitioners.
The application lists RioZim as the primary respondent, with the Master of the High Court and the Registrar of Companies cited as second and third respondents, respectively.
In a sworn affidavit, ZDAMWU General Secretary Justice Chinhema, revealed that RioZim owes its workers a staggering US$5.6m in unpaid wages and accrued benefits across the group and its subsidiaries.
He also disclosed that the Zimbabwe Revenue Authority (ZIMRA) is investigating allegations of financial misconduct, including the non-remittance of value-added tax (VAT) and pension contributions deducted from employee salaries.
ZIMRA has formally demanded access to RioZim’s asset register amid suspicions of fraud and tax evasion.
The mining firm is said to owe ZIMRA approximately US$5.5m and ZWG9m. Criminal proceedings have already been initiated in some instances, with ZIMRA alleging “systematic non-compliance with statutory tax and pension obligations.”
The financial strain extends to RioZim’s utility and vendor relationships.
Recently, ZESA disconnected power at RioZim’s flagship Renco Mine over unpaid electricity bills.
Further financial irregularities are cited in RioZim’s dealings with its associate company RZM Murowa, to which it owes US$55m—a debt ZDAMWU insists requires forensic scrutiny due to its “suspicious structure.”
“Electricity has also been switched off at RioZim Limited (Renco Mine) due to the debt of US$4,7m.
“The first respondent (RioZim) faces serious criminal proceedings after the Zimbabwe Revenue Authority filed charges related to withholding value-added tax and the Mining Industry Pension Fund for deducting pensions without remitting payments. These cases are at various stages of criminal prosecution.
“Another issue involves a contingency liability of US$30m for a commercial dispute with a foreign liquidator regarding a purchase agreement that extended from July 2013 to January 2025.
“Another unsustainable debt is the US$55m owed to RZM Murowa, an associate company, as corroborated by Annexure RZ17. Due to its suspicious structure, verifying this intercompany debt is necessary,” Chinhema said in court papers.
Furthermore, the company’s position is dire and necessitates court intervention to prevent the collapse of the business as its equity stood at ZWG149.2m as of June 30 2024.
This dire assessment was echoed by RioZim’s own board, which recently acknowledged a steep decline in operational performance.
Despite a sharp rise in global gold prices the company’s gold output dropped significantly.
The High Court is expected to set a hearing date soon.
If RioZim fails to respond to the application within 10 days of service, corporate rescue proceedings will commence by default.
RioZim’s financial and operational collapse has triggered alarm in Zimbabwe’s mining industry, prompting unions and regulators to push for urgent intervention.
ZDAMWU’s High Court application warns that the company is “financially distressed”, unable to pay its debts, and teetering on the brink of insolvency.
The situation has been further compounded by leadership instability following the death of RioZim’s majority shareholder, Harpal Randhawa, in a plane crash in September 2023.
