HomeBusiness DigestRioZim warns of bigger loss

RioZim warns of bigger loss

LISTED mining group RioZim Limited (RioZim) has warned of intensified losses in the company’s 2014 annual financials to be released on March 27 on account of short supply of matte at its refinery, poor gold prices and increased finance charges.

Taurai Mangudhla

“Against this background, the group expects to report an increased operating loss for the financial year ended 31 December 2014 over the less that was reported in June 2014. The net loss position of the group will be further worsened by finance charges incurred on the group’s exposure,” said RioZim in a statement.

The group said matte supply at its Empress Nickel Refinery (ENR) continued to be erratic and in short supply thereby seriously constraining performance for the second half of the year. In the first half of 2014, RioZim reported a US$4,6 million loss.

The group said the sole supplier of matte went on a maintenance shut down in the third quarter of the year.

Even after the maintenance shutdown, the challenges persisted to the fourth quarter resulting in ENR getting only 30% of the annual contractual matte supplies and as a result operating at 25% capacity, resulting in further loses in the second half of the year.

“Whilst the group is engaged in initiatives that will mitigate the concentration risk of dependence on one matte supplier, such engagements ware only likely to start yielding results in the second half of 2015,” said the group.

RioZim said its Masvingo gold producer, Renco Mine, reported a 6% growth in production in the full year to December 2014, up on prior year.

However, the mine’s production in the second half of the year was 0, 5% lower due to lower than expected tonnnages and ore grade.

“In addition, the mine’s performance was performance was adversely affected by the continued weakening of gold prices especially in the fourth quarter of the year,” it said.

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