RioZim suspends operations again
ZIMBABWE Stock Exchange-listed miner, RioZim, has once again involuntarily suspended operations at three of its gold mines due to foreign currency shortages.
The mining group temporarily closed Cam and Motor Mine in Kadoma, Renco Mine in Masvingo and Dalny Mine in Chegutu in October last year citing a shortage of foreign currency needed to import critical consumables and spare parts.
However, operations at the three mines resumed after the Reserve Bank of Zimbabwe in November made commitments to support all gold producers’ operations by allowing them to maintain 55 percent of their export earnings in foreign currency nostro accounts.
The Central Bank also committed itself to increasing export incentives on all minerals. In a statement last week, RioZim said: “Notwithstanding these commitments, the board of RioZim Limited regrets to advise that the Reserve Bank of Zimbabwe through its wholly-owned subsidiary Fidelity Printers and Refiners (Private) Limited has been failing to meet these commitments.
“As of date, the company has experienced significant and persistent delays in payment of its foreign currency allocation for deliveries made to Fidelity Printers and Refiners since December 2018 and this has severely affected the viability of the company’s operations and consequently, the company has been recently forced once again, to involuntarily suspend production across all three of its gold mines pending full payment foreign exchange proceeds.”
It said as per its reviewed half year financial statements for the period ending June 30, 2018, the gold business contributed circa 90 percent of the total revenue.
“Therefore the current stoppage in production has material impact on the company’s performance. In the interim as a result of the above, the company is currently engaging the Reserve Bank of Zimbabwe, the Chamber of Mines and other authorities on how to expediently resolve the matter,” said RioZim.
In the event the engagements are unable to yield any positive resolution in the immediate future to the challenge facing RioZim, production at all the three gold mines would remain suspended indefinitely.
The company was incorporated on August 29, 1956 as Rio Tinto Southern Rhodesia Ltd.
It was set up initially to develop and mine the Empress Nickel deposit in the Midlands and was the first mining operation to be set up outside Europe by Rio Tinto plc.
RioZim separated from Rio Tinto plc in 2004 and became a wholly owned Zimbabwean company that produces gold, coal, toll refines nickel and copper. — @okazunga