New Zimbabwe.com

RioZim revenues down US$14 million as foreign currency shortages insist

By Alois Vinga


GOLD mining giant, RioZim’s revenue went down US$14 million due to consistent foreign currency shortages.

According to the mining company’s statement of financial results for the year ended December 31, 2018, revenue for the year declined 15 percent to US$75.4 million from US$88.9 million.

“The group’s underperformance was due to low production volumes in the second half of the year and the inability to complete planned capital projects due to foreign currency funding constraints, that could have sustained and increased production,” RioZim said in the statement.

Gold producers in Zimbabwe are legally required to sell their output to the Reserve Bank of Zimbabwe’s subsidiary Fidelity Printers and Refiners. They are also supposed to be paid 55 percent of their earnings in US$ while the remainder is paid through the RTGS$ bank accounts.

Last year the entity approached the courts seeking an order to compel the Apex Bank to pay over US$92 million it claimed was owed dating back to 2016.

The mining giant has also halted production at its three gold mines since October last year, after Zimbabwe’s Central Bank failed to provide foreign currency the company needs to keep operating.

Gold prices according to the statement averaged US$1247/oz during the period under review, faring slightly better than the levels of US$1242/oz.

RioZim posted an operating profit of US$2.4 million, 71 percent below the prior year’s operating profit of US$ 8.1 million.

The group is in the process of developing a Biological Oxidation Plant, in order to treat the refractory ore reserves.

Unfortunately, officials argue the scarcity of foreign currency held back the project in the year under review. Once operational, the BIOX plant is expected to enable the company to double its production output.

Renco Mine produced 591 kg of gold, which constitutes 61 percent of the total produced in the first half of the year.

The total period’s production was a 22 percent reduction from the prior year.