By Alois Vinga
CONTINUOUS power cuts have choked Zimbabwe Stock Exchange listed miner, RioZim resulting in reduced gold production.
Speaking during the presentation of financial results for the first half of 2019, the mining company’s chairman, Saleem Beebeejaun said electricity outages affected production at two of the company’s plants.
“Dalny Mine experienced acute power cuts in the second quarter of the year. This worsened during the month of June with the Mine only afforded an average of 4-6 hours of plant running time per day. As a result, production regressed by 7% to 215kgs from 232kgs recorded in the same period in 2018,” said Beebeejaun.
Beebeejaun added that Renco Mine experienced some plant breakdowns which reduced production processing time coupled with incessant power cuts in the second quarter of 2019 which had a negative impact on gold output.
As a result, the mine produced 259kgs which is only 72% of comparative period production of 360kgs.
The power cuts come at a time when the group continues to pay for uninterrupted electricity supply.
During the period under review, revenue stood at $136.7 million.
The low revenue achievement is mainly attributable to the decrease in gold production associated with the incessant power cuts experienced during the period under review.
The gold price however increased to an average US$ 1 346/oz against US$1 298/oz recorded in the comparative period in 2018 and this provided a cushion on the lower production volumes.
The company also benefited from the combined effect of lower costs in US$ terms for its very limited Zimbabwean dollar denominated costs which resulted in the group recording an operating profit of $46.9 million.
The group closed the period with a net profit of $38.2 million.
“A substantial amount of the company’s costs is being converted back into US$ terms and, therefore, it is expected that there will be future pressure on the bottom line of the group,” said the RioZim boss.
The company reported the introduction of various economic stabilisation programs presented complex challenges for the group in the first half of 2019.