Floods push RioZim to US$1,5bn loss

POST-TAX losses at RioZim Limited widened to $1,5 billion during the half year ended June 30, 2021, after heavy rains triggered flash floods and crippled operations at the firm’s flagship Cam & Motor Mine.

RioZim posted a $77,4 million loss during the same period last year.

The ZSE-listed mining giant said it was running into headwinds stemming from rolling blackouts of up to eight hours a day, which held back production across Zimbabwe’s industries.

However, the volatile currency, which has this year suffered its worst drabbing against the United States dollar, lifted revenues to $2,6 billion during the period from $616,4 million previously, according to RioZim chairperson Saleem Beebeejaun.

“The marked increase in revenue was a direct result of the depreciation of the local currency against the United States dollar,” Beebeejaun said in a commentary to the financial statements.

“Resultantly, the low production achieved led to a loss of $1,5 billion compared to the same period prior year’s loss of $77,4 million.

“Cam & Motor Mine suffered from incessant rains during the first quarter, which made some of the areas in the mine’s open pits inaccessible resulting in the mine obtaining lower grade ore than planned.

“Cam also experienced persistent rain-induced breakdowns on the plant which also negatively affected plant throughput.

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

Zimbabwe experienced one of its best rainfalls during the 2020/21 agricultural season.

But this became the biggest threat to mining companies.

Overall gold production at RioZim, which controls Dalny and Renco mines, retreated by 4% to 564kg during the review period, compared to 586kg previously.

RioZim said its biological oxidation (Biox) plant at Cam & Motor Mine would be brought online before the end of this year.

The plant will see the mining group process precious minerals.

“The company is focused on the completion of and commissioning of its Biox plant project before the close of the financial year as this 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 are continuing in earnest,” Beebeejaun.-newsday.co.zw