Gold output at RioZim declines in Q1 as power challenges persist

  • Gold production dropped by 41%
  • Production at Cam and Motor plant fell by 62%
  • Diamond production was subdued at 61%

Harare – Integrated mining and metallurgical company RioZim posted declined gold and diamond production in the first quarter ended 31 March 2020 owing largely to incessant power shortages.

“As a result of erratic power supplies, the Company’s gold production fell by 41% compared to the same quarter in 2019.”

The company said during the quarter, all mining activities were concentrated at One Step Mine with the company hauling ore to the Cam and Motor plant.

Since ore resources at One Step Mine are of significantly lower grades compared to the Cam ore resources, production dropped by 62% compared to the same period last year where production was from higher grade Cam resources.

Meanwhile, progress on the Biological Oxidation (BIOX) Project was hampered by acute funding challenges and foreign currency availability remains a stumbling block to the timeous commissioning of the project.

Power supply remained erratic during the greater part of the period under review with supply only abating at the end of the quarter at the Dalny Mine.

Consequently production at Dalny Mine fell by 52% compared to the prior comparable period in 2019.

However, Renco Mine recorded a 9% growth in production volumes compared to the same period last year largely attributable to improved plant availability and reduced load shedding during the quarter.

In the diamond business, RioZim said diamonds production at the Group’s associate Murowa Diamonds limited was subdued at 61% of first quarter 2019 production and the lower volumes are attributable to inconsistent power supply during the period.

In light of the coronavirus pandemic, the company said there have been no disruptions to production as the company was exempted during the national lockdown, albeit the threat to the company’s raw material supply chain which is predominantly imports, remains a key business risk as stringent cross border controls continue to be enforced in various countries.

RioZim also said, “A probability weighted expected cash flows and sensitivity analysis on the Group’s future cash flows shows that the Company remains significantly exposed to the negative impacts of COVID-19. The future, therefore, remains highly uncertain and the full impact is currently impractical to quantify in monetary value terms.”

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