Business Reporter
RIO Zim gold unit, the Cam & Motor will start operations in the second half of the year after signing an engineering procurement and construction contract, the company said.  “A new mining operations based on Cam & Motor ore bodies is on course with the design and manufacturing of the plant for the operations having commenced,” said Rio Zim in its financial statement on Friday. “The company has every reason to believe that the operations will be on course to start production in the second half of 2014.”

The diversified coal miner said given that the mine was historically Zimbabwe’s largest gold producer, Cam & Motor “should be excellent addition to the group’s operating portfolio”.

Cam & Motor in Kadoma stopped operations in 1968 after it had become too expensive to operate. It was an underground mine but this time will re-open as open cast.

In the six months to December 2013, RioZim reported weak financials, negatively impacted by the decline in global metal prices and high finance costs. The group recorded a 46 percent growth in revenue from $72,2 in comparative period million to $105,6 million.

The growth was, however, offset by a 78 percent increase in cost of sales that grew to $84 million from $47 million Operating margins declined to 2 percent from 6,4 percent in the same period 2012, resulting in a decline in operating profit by 55 percent to $2,1 million.

Net finance costs of $9,7 million reversed the operating profit to a loss of $4,7 million.
The share of associate (Murowa Diamond) improved to $800 000 from a loss of $300 000, as it benefited from a 24 percent increase in the price per carat on improved quality.

Empress Nickel Refinery recorded 132 percent growth in revenue driven by a change in its business model from toil-refining to own production. The operation traded profitably in 2013 although the margins were negatively affected by the high electricity tariffs and stop and start costs resulting from inconsistent liquid oxygen supply.

Another gold unit, Renco Mine achieved a slightly more than break-even operating profit although the operation was negatively affected by the decline in gold prices coupled with the disturbances experienced in the first quarter. Cash generated from operations improved as a result of improved production at Empress.

Total assets improved by 1 percent as a result of $3,3 million that was invested in capital improvements mainly at ENR which were completed in the first quarter of 2014.

A new oxygen plant was commissioned at ENR in November last year and is expected to result in significant cost savings of approximately $300 000 per month.

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