RioZim loss widens to $1,5 billion

08 Oct, 2021 - 00:10 0 Views
RioZim loss widens to $1,5 billion

eBusiness Weekly

Business Writer

Diversified resources group, RioZim Limited, performance for the half year to June 30, 2021 was subdued as loss for the period widened to $1,5 billion from $77,4 million recorded during the same period in the prior year on the back of a fall in gold production.

During the half-year under review, the group produced 564 kilogrammes of gold, which was a 4 percent decline from the same period prior year’s production of 586kg.

Chairman, Rashid Beebeejaun, said the depressed production was mainly due to the rain induced power outages and plant breakdowns experienced in the first quarter of 2021, which stifled plant throughput across the group’s mines.

Cam and Motor Mine was negatively affected by incessant rains during the first quarter, which made some of the mining areas in the open pits inaccessible resulting in the mine obtaining lower grade ores than planned.

“Cam also experienced persistent rain induced breakdowns on its plant, which negatively affected plant throughput.

“Consequently, gold production for the period fell by 9 percent to 181kg compared to the prior period’s 199kg,” said Beebeejaun.

Gold production at Renco Mine dropped by 3 percent to 278kg from 288kg in the same period in the prior year. The reduced production was a result of lower than anticipated plant throughput arising from rain induced power outages in the first quarter.

Dalny Mine, however, achieved a 6 percent growth in production for the period to 105kg from 99kg recorded in the same period last year.

Gold prices remained relatively consistent with same period prior year prices and averaged US$1 777 per ounce, a 4 percent increase against US$1 713 per ounce.

Figures from the group show that revenue generated during the period surged to $2,6 billion in comparison to $616,4 million in the same period prior year.

“The marked increase in revenue was a direct result of the depreciation of the local currency against the United States dollar.

“The plant capacitation initiatives implemented during the period to mitigate processing bottlenecks yielded positive results as plant throughput and overall gold production improved,” he said.

On the base metal business, RioZim said the Empress Nickel Refinery remains under care and maintenance as the company continues to explore sources of consistent raw material supply to bring the refinery back to full capacity.

Its associate and diamond business, RZM Murowa (Private) Limited, produced 240 000 carats for the six-month period, representing a 4 percent decline from the comparative period’s 250 000 carats as a result of processing low grade ore from the K2 pit throughout the period after migration of mining activities from the depleted high grade K1 pit.

However, the associate sold more carats compared to prior year drawing from inventory, hence its share of profit rose to $252,9 million from the prior period’s share of loss of $5,3 million.

Meanwhile, RioZim conducted Environmental Impact Assessments (EIAs) on its 178MW proposed solar power project for all the sites at its mines which are a prerequisite before implementation.

According to the group, the EIAs are expected to be concluded in the second half of the year.

Funding for the 2 800MW Sengwa Power Station was affected by Covid-19 pandemic as financiers and lenders took a conservative approach making it difficult to bring financial closure for this project.

Said Beebeejaun: “However, engagements with potential financiers for the projects, remain alive despite the challenges and uncertainties brought about by the Covid-19 pandemic.”

Going forward, the company is focused on the completion and commissioning of its BIOX Plant Project before the close of the financial year as the project remains a key priority for the group.

All outstanding equipment deliveries were fast tracked subsequent to period end after payments of the final instalments and installations are continuing in earnest.

RioZim did not declare a dividend.

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