- RioZim's full-year loss more than quadrupled, reaching ZWL95.8 billion
- RioZim's annual gold production was almost dwarfed by Padenga's Q1 output
- This highlights the stark contrast in operational performance between the two companies
Harare- Embattled loss-making company RioZim, once a renowned gold producer, has suffered a staggering full-year 2023 loss of ZWL95.8 billion, up significantly from ZWL20 billion the previous year as the company continues to struggle with meaningful gold production.
RioZim operates three gold mines - Renco, Cam and Motor, and Dalny. Notably, the Dalny gold mine recorded zero production as it remained under maintenance throughout the year.
Production at Renco mine was just 441 kg, up slightly from 402 kg in 2022. However, the company cited frequent blackouts as a major factor affecting production.
The worrying fact is that with annual production at only 441 kg, the quarterly and monthly output must have been extremely low. This raises questions about the effectiveness of the company's management.
The Cam and Motor mine fared slightly better, recording 499 kg, down 5% from 527 kg in 2022. But again, this level of production is concerning for a company of RioZim's stature.
RioZim, despite having operations in diamonds and chrome, has still experienced a tremendous loss.
However, more interestingly, Padenga Holdings' first-quarter production of 751 kg was almost equivalent to RioZim's annual production.
In 2019, RioZim was the third-ranked gold-producing firm, trailing only Caledonia and Freda Rebecca.
However, two years later, Padenga has already started doing wonders and is now targeting to become the largest gold producer in the country. This suggests that Padenga has solid management.
The dwindling of RioZim's gold output cannot be blamed on blackouts, as other miners are suffering the same fate.
It appears to be more of a management crisis than an economic crisis. For instance, it is puzzling why the owner of the company was involved in the sales department of gold after a plane crash.
Despite firmer gold prices, the Renco mine has been plagued by ongoing machinery breakdowns since 2022, and this issue persists to this day.
A similar fate has befallen BNC, which has been grappling with a SVR bull gear problem since 2022 that ultimately led to zero production in Q3 2023, forcing the company to undergo maintenance.
The Dalny mine has also been in a state of prolonged maintenance for years, with the company repeatedly stating that it is under maintenance.
These issues point to a profound lack of effective management across the operations.
The company is currently seeking an investor to fund a 178 MW solar project, but with such a derailed management system, it is unlikely that any serious investor would be willing to risk their money recklessly.
Proper management is the key to overturning the trading losses and operating losses that have plagued the company.
Addressing the root causes of the recurring machinery breakdowns and operational challenges is crucial to restoring the company's financial viability and attracting much-needed investment.
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