RIOZIM, a diversified resources firm involved in gold and coal production and the toll refining of nickel and copper, was established in 1956 as Rio Tinto Southern Rhodesia Ltd and listed on the Zimbabwe Stock Exchange in 1969.
It became fully Zimbabwean-owned in 2004 after parting ways with Rio Tinto plc.
Despite a global gold price surge that boosted peers such as Padenga and Caledonia, RioZim has struggled, facing serious allegations of financial misconduct, including fund diversion, unpaid wages, and misappropriation of pension contributions.
These issues, reportedly causing severe worker hardship, have led to a High Court application filed on April 28, 2025, by the Zimbabwe Diamond and Allied Minerals Workers Union and others, seeking to place the company under court-supervised rescue per the Insolvency Act.
RioZim allegedly owes workers US$5,6 million, while the Zimbabwe Revenue Authority (Zimra) is investigating further irregularities. These problems underscore the firm’s deep financial and structural challenges.
Turning to RioZim’s business model and 2024 financials, revenue plunged 40% from US$30,8 million to US$18 million. The company posted a gross loss of US$6,6 million and a deepened operating loss of about US$24 million, highlighting worsening financial instability and underlying structural issues.
Looking at its model, RioZim has five strategic business units (SBUs), gold business, base metal business, chrome business, diamond business and energy business.
Gold business
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This segment comprises Renco Mine, Cam & Motor Mine, and Dainy Mine.
Renco Mine saw a 38% reduction in plant throughput, and the grade of ore fell by 9%, resulting in a 45% drop in gold production, down to 243 kg from 441 kg the previous year.
Cam & Motor Mine produced only 185 kg of gold, a 63% decline from 499 kg in 2023, due to low gold recoveries and a shortage of high-quality ore.
At Dainy Mine, underground operations had already been suspended in prior years, leading to flooding of shafts and all underground areas. Consequently, all underground plant and equipment became submerged, prompting a write-down of assets.
The carrying value of US$744,574 was reduced to zero, resulting in an impairment loss recognised under administrative costs.
Base metal business unit
The refinery remained under care and maintenance throughout the year. Efforts to secure raw materials needed to restart full operations are ongoing.
Diamond business unit
The diamond associate experienced a 47% decline in plant throughput, primarily due to equipment unavailability caused by persistent breakdowns.
As a result, all heavy mobile equipment was decommissioned, and the operation shifted to hired equipment. Carat production fell by 13%, down to 359 000 carats from 414 000 the previous year.
Energy business unit
There was no progress on the company’s energy projects during the reporting period, largely due to a lack of financing.
Chrome business unit
This was the only SBU to register meaningful progress.
The company formed strategic partnerships to exploit its chrome claims in Darwendale, leading to the commencement of mining activities during 2024 through a joint venture arrangement.
Financial position
On the balance sheet, RioZim’s current ratio stood at 0,11, indicating that the company has just 11 cents in current assets for every US$1 in current liabilities.
Notably, 96% of those liabilities are trade and other payables, with RZM Murowa, under the diamond business, accounting for 60% of that figure.
Now, comparing apples to apples, Padenga and Caledonia posted strong performances in the same period. Padenga’s revenue grew by 43,3% to US$223 million with net profit up 392%, driven by its mining subsidiary Dallaglio, and Caledonia met its 2024 production target with 76 656 oz of gold, surpassing the previous year’s output.
RioZim stands out as a notable underperformer. Its struggling business units and operational setbacks highlight deep structural problems, making it the only listed mining company in the sector facing such significant challenges, which further lends credibility to the allegations of financial mismanagement.
In 2024, Zimbabwe’s gold exports generated US$2,5 billion, marking a 37% increase from the previous year. This growth was largely driven by Fidelity Gold Refinery (FGR) and small-scale miners, who together accounted for approximately 75% of total gold output.
With mining contributing over 90% of the country’s exports, the sector remains a cornerstone of Zimbabwe’s economy.
In May alone, FGR recorded a 27,6% increase in gold deliveries, receiving 3,488 kilogrammes of gold compared to 2,734 kilogrammes during the same period in 2023. This upward trend highlights the strong performance of Zimbabwe’s broader mining sector.
Unlike the retail sector, which has been impacted by currency woes, the mining sector operates predominantly in US dollars, suggesting that RioZim’s troubles stem less from the macroeconomic factors.
If the company is to be rescued, it is essential that this process not merely address the symptoms but confront the underlying issues. Lessons must be learned to ensure RioZim does not fall back into such a financial quagmire.
- Taimo is an investment analyst with a talent for writing about equities and addressing topical issues in local capital markets. He holds a First Class Degree in Finance and Banking from the University of Zimbabwe. He is an active member of the Investment Professionals of Zimbabwe community, pursuing the Chartered Financial Analyst charter designation.
- or [email protected], X: TWDuma_
