RioZim loses money despite gold boom: Mine breakdo...

RioZim loses money despite gold boom: Mine breakdowns, costs blamed

Nyashadzashe Ndoro

CHIEF REPORTER

RioZim Limited, a Zimbabwean mining and metallurgical company, reported a net loss for the year ended December 31, 2023, despite a slight increase in gold production and favourable gold prices.

The company’s chairman, Saleem Rashid Beebeejaun, attributed the loss to a challenging macroeconomic environment and rising production costs.

“The Group’s financial year was marked by the sad loss of the Company’s major shareholder’s representatives, and four of the Company’s executives in a fatal plane crash,” Beebeejaun said in a statement.

“This unfortunate accident cast a dark cloud on the 2023 financial year for the Company and we continue to mourn these dear departed colleagues.”

RioZim’s gold production for the year reached 940kg, a modest 1% increase from the previous year. However, this achievement was overshadowed by persistent plant breakdowns, particularly at the Cam and Motor Mine. This mine experienced milling section issues that resulted in reduced throughput.

Beebeejaun acknowledged the challenges, stating: “The subdued production volumes were due to persistent plant breakdowns largely experienced at Cam and Motor Mine, which struggled with breakdowns in its milling section resulting in reduced throughput.”

The average gold price for the year was US$1 913 per ounce, an 8% increase compared to 2022. This positive trend, along with an increase in exchange rates, contributed to a significant rise in RioZim’s revenue, reaching ZWL216.1 billion (US$1.2 billion) in 2023, compared to ZWL20.6 billion (US$0.11 billion) in the prior year.

Renco Mine, on the other hand, showed positive results with a 10% production increase to 441kg from 402kg in 2022. The company highlighted its efforts to address power supply issues that continue to hinder production at Renco.

“The Company is focused on stabilising power supply at Renco, which remains a production obstacle for the mine,” the statement said.

“In order to curb this problem, the mine continues to invest in additional generator capacity to limit the impact of power cuts on production. Renco Mine is also reviewing its power supply arrangements and will consider all opportunities and alternatives possible that will result in improvement in power supply to the mine.”

Dalny Mine remained on care and maintenance throughout 2023, resulting in zero gold production. The company is reportedly seeking regulatory approval for small-scale operations to generate cash flow and reduce the financial burden on the group.

The company’s refinery and chrome business segments also faced challenges. The refinery remained under care and maintenance, while the legal dispute surrounding the company’s chrome claims in Darwendale continues. RioZim Murowa (Private) Limited, the company’s diamond associate, experienced a 3% decline in diamond production due to processing of low-grade stockpiles.

RioZim expressed optimism for the future, attributing its positive outlook to various intervention plans. The company is focusing on extending the life of mine at Murowa through exploration and development efforts. Additionally, efforts are underway to improve plant uptime at Cam and Motor Mine and secure alternative power sources for Renco Mine.

“The future of the Group looks positive as these initiatives are set to stabilise production and bring the Group back to profitability,” Beebeejaun concluded.