- Gold production for the six months to 30 June 2021 fell by 4% to 564kg
- Loss for the period widened to ZW$1.5b from prior year’s loss of ZW$77.4m due to the lower production
- Working on resuming chrome business and bringing back nickel production to full capacity
- Higher diamond sales offset lower production
HARARE – In a reminder that some fundamentals still exert more influence than the economic fallout from COVID-19, ZSE-listed integrated mining and metallurgical company, RioZim reported a 4% slump in gold production for the six months ended 30 June 2020 attributed 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.
Gold production for the period fell to 564kg from 586kg recorded in the same period last year.
The Group’s mining operations include Renco Gold Mine in Masvingo Province, and Cam & Motor Gold Mine and Empress Nickel Refinery; both in the Mashonaland West Province.
In a statement accompanying the financial statements, Group chairperson Saleem Beebeejaun highlighted that the lower production achieved led to a loss of ZW$1.5 billion compared to the same period prior year’s loss of ZW$77.4 million.
Revenue for the period, however, saw a significant increase to ZW$2.6 billion in comparison to ZW$616.4 million in the same period last year.
“The marked increase in revenue was a direct result of the depreciation of the local currency against the United States dollar,” Beebeejaun said.
A look at the gold business shows that Renco Mine’s production dropped by 3% to 278kg from 288kg in the same period last year as a result of lower than anticipated plant throughput arising from rain induced power outages in the first quarter.
Dalny mine achieved a 6% growth in production for the period at 105kg against the same period prior year’s production of 99kg.
“The plant capacitation initiatives implemented during the period to mitigate processing bottlenecks yielded positive results as plant throughput and overall gold production improved,” Beebeejaun said.
Meanwhile, Cam & Motor Mine’s gold production for the period fell by 9% to 181kg compared to the prior period’s 199kg due to a combination of incessant rains experienced in the first quarter and plant breakdowns.
On nickel operations, Beebeejaun said that the Group continues to explore various sources of consistent raw material supply to bring the Empress Nickel Refinery back to full capacity while litigation involving the Company’s chrome claims in Darwendale is pending in the courts.
“The Group, however, remains committed to resuming its chrome operations after the conclusion of the court case,” Beebeejaun said.
On the same note, RZM Murowa Diamonds (Private) Limited, the Group’s Associate, produced 240 000 carats for the six-month period, representing a 4% decline from the comparative period’s 250 000 carats.
The low production volumes are 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, more diamonds were sold compared to the prior-year drawing from inventory, hence the share of profit from the associate rose to ZWL$252.9 million from the prior period’s share of loss of ZWL$5.3 million.
The Group remains optimistic about the progression of the 2800 MW Sengwa Power Station despite facing hurdles in attracting financiers and lenders.
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