Zimpapers Logo

Nelson Gahadza Business Reporter

RioZim Limited says gold production for the year ended December 31 2021 declined by seven percent to 1 122kg compared to the same period last year largely due to delays in the completion of the firm’s BIOX Plant project and reduced grades.

The group’s US$17 million Biox plant was commissioned by President Mnangagwa on April 14 2022, having successfully completed testing of its various elements.

Mr Saleem Rashid Beebeejaun, the group’s chairman, in a statement of the financials said due to delays in the completion of the BIOX Plant Project, the lifespan of the stopgap one-step mining operation was extended and continued to supply ore to the Cam & Motor plant.

“The grades, however, significantly dropped which resulted in subdued production. This impacted the group’s production as both Dalny and Renco recorded almost consistent production from the prior year,” he said.

He said following the commissioning of the Biox plant, production is forecast to improve as Cam & Motor returns to producing from its high grade pits.

According to Mr Beebeejaun, the gold price recorded a marginal one percent increase from the prior year to an average of US$1 774/oz for the year compared to US$1 765/oz in the prior year.

He noted that despite a seven percent decline in gold production, the group’s revenue increased by 84 percent to $5,8 billion compared to the prior period’s $3,1 billion primarily due to the depreciation of the local currency against the United States dollar.

In terms of individual gold business performance, Renco Mine operated at almost the same level of production as the prior year, achieving 561kg of gold, three percent lower than 580kg produced in the prior year.

The RioZim chairman said the slight shortfall in gold output from the prior year was attributed to reduced plant throughput as a result of increased power cuts during the year.

At Dalny Mine, there was a six percent growth in gold production achieving 209kg of gold from 198kg produced in the prior year.

Mr Beebeejaun said the growth in gold production was due to increased plant throughput as plant improvements carried out during the year successfully stabilised the plant.

Gold production at One-Step mine fell by 18 percent from the prior year’s production of 427kg to 351kg.

“The low gold output was attributable to lower grades which dropped from the prior year.

“The life of mine was extended during the year despite the grades deteriorating and mining operations continued for the full year,” said Mr Beebeejaun.

He added that the One-Step ore was processed at the plant in Cam & Motor as had been happening in the previous year

At the group’s flagship, Cam & Motor Mine there was no gold production during the year which was a carry forward from prior year as the mine continued with the construction of its BIOX Plant Project throughout the year.

Mr Beebeejaun said the completion of the BIOX Plant, which was scheduled for the second half of the year, was delayed due to inadequate foreign currency and Covid-19 pandemic induced challenges.

He said commissioning of the BIOX Plant Project would have enabled resumption of mining operations at the Cam & Motor high grade ore pits.

On the base metals business, the refinery operated under care and maintenance throughout the period.

During the year under review, 210 tonnes of matte, 78 tonnes of platinum group metals and 21 tonnes of copper were produced and revenue of $381 million was generated during the year from the projects at the refinery which partially funded the care and maintenance costs.

Mr Beebeejaun said the company continues to engage various stakeholders to identify sources of raw material to feed the refinery to normal production capacity and stakeholders will be kept appraised.

On the chrome business, he said the legal dispute relating to the company’s chrome claims in Darwendale remained under litigation as at year end and the company continues to pursue the finalisation of the court case.

Diamond production for the group’s associate, Murowa, declined by 28 percent to 414 000 carats from 579 000 carats produced in the comparative year, 2020.

Mr Beebejaun said the associate processed material from the low grade stock piles with limited mining activities from the K2 pit.

“This was in contrast to the prior year whereby production was from the mining activities in the K2 pit, which has slightly better grades.

“The key focus for the associate is completion of its Project Crown Jewel which entails increasing the current processing plant capacity to move to a ‘low grade high volume’ strategy in order to sustain production as it is currently processing low grades,” he said.

He noted that the group’s share of profit from the associate increased to $525,8million compared to $494,8 million in the prior year.

On energy projects, at the 178 MW solar project, the company concluded the Environmental Impact Assessments (EIAs) for all the proposed solar sites which are a prerequisite before the implementation of the solar projects at the various mines.

Mr Beebejaun said engagements with potential financiers are on-going albeit at a slower pace due to the complexities brought about by the Covid-19 pandemic.

At the 2 800MW Sengwa Power Station, he said due to a mix of considerations brought about by the Covid-19 pandemic, the company has put up various financing options to attract potential investors into the project.