Crippling power cuts hit RioZim

BUSINESS REPORTER

 

Crippling power  cuts , foreign currency shortages, and high production costs have negatively impacted the overall performance of listed miner RioZim,board chairman Saleem  Beebeejaun has said.

The headwinds resulted in the group suffering a loss  totaling  ZWL$ 8.7bn in the six months to June 30, 2023.

The mining concern is technically insolvent because  its  current liabilities   were valued at ZWL$481.54bn, exceeding its total assets, which were worth ZWL$133.23.

“The group experienced a challenging first six months of the year marked by acute power cuts and foreign currency challenges,”  he said.

“The dynamic and challenging macro-economic environment remains an impediment to business growth and continues to have a negative effect on the operating performance of the group.

“The group incurred a net loss for the period of ZWL$8.7bn. Despite the growth in output in the current period, the cost base of the group remained high due to the rising cost of inputs,” Beebeejaun said.

Revenue   for the group, however, increased to ZWL$49.96bn during the period under review,   from ZWL$4.76bn  reported in the prior comparative period.

Beebeejaun attributed the rise in revenue to both an increase in gold output as well as exchange rates variation from the comparative prior period.

The group managed to increase production output, driven by the BIOX Plant at Cam & Motor Mine and the 500 TPH Plant at Murowa.

Both plants were commissioned in the prior year and yielded positive returns in the current period.

In spite of the challenges faced, Beebeejaun said the future of the group, through the BIOX Plant and the 500 TPH Plant, is promising and the outlook looks positive.

The stability and performance of the Group’s two major projects, the BIOX Plant at Cam & Motor and the 500 TPH Plant at RZM Murowa, during the period provides confidence for a positive outlook in the second half of the year as the group is set to continue sweating these two assets towards designed capacity.

The group’s gold production recorded a 6% growth to 417kg from 393kg attained in the comparative prior year period.

Power supply, however,  remained a significant threat to the business as this  curtailed plant running time.

RioZim installed back up power generators to mitigate the production losses occasioned by power cuts. However, this comes with an increased cost of production.

 

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