WHILE most miners the world over have taken the opportunity to recapitalise and invest in additional capacity because of rising mineral prices, RioZim Limited has operated under difficult conditions and seem to have missed the chance.
Not only did the macro-economic environment affect the companyâ€™s performance, but the coming into law of the Indigenisation and Economic Empowerment Act in March chased a lot of potential investors away.
The Actâ€™s empowerment clauses also form the basis of the Mines and Minerals Amendments Bill.
Against all this background, RioZim recorded in historical terms, a net attributable profit of $32 quadrillion for the interim period ending June 30 compared to $46 billion during the same period last year.
“The groupâ€™s profit performance deteriorated in the second quarter because of the scaling down of operations at Renco Mine in April as a result of shortage of inputs and the disruption of operations at Empress Nickel Refinery due to power supply breakdowns,” RioZim said.
The groupâ€™s cash flow continued to be impaired by the delay in the payment for gold deliveries by the Reserve bank which dates back to November 2006.
The groupâ€™s overall production was low with Renco Mine producing 255kg of gold compared to last yearâ€™s 368kg. Empress Nickel refinery recorded an output of 3 586 combined metal tonnes compared to 5 911 tonnes. Sengwa Colliery produced 99 042 tonnes compared to 88 845 tones last year.
“Murowa diamond (Private limited) recorded an improvement in production to 135 000 carats compared to 46 211 carats in the same period last year,” said RioZim.
The delay in implementating of the expansion project continues to handicap the attainment of the full potential of the project.
By Paul Nyakazeya