RioZim banks on two US$100m hi-tech plants

RIOZIM Limited says future prospects are underpinned on the successful performance of the BIOX plant at flagship mine, Cam & Motor and the 500tph plant at diamond company RZ Murowa once all the necessary teething challenges are addressed.

The group invested in excess of US$100 million on two hi-tech expansion projects to secure the future of the company, these being the Biological Oxidation (BIOX) plant at Cam & Motor Mine and Project Crown Jewel 500tph plant at RZ Murowa.

According to the Group, the two multimillion dollar investments came in the face of a mix of macroeconomic adversities, power shortages and increased global uncertainty.

The BIOX plant was officially commissioned by President Mnangagwa on April 14, 2022 while in 2020 the group embarked on a 500tph greenfield project, which allows the company to process all of its ore sources on-site, low-grade ore and re-crush stockpiles to maximise diamond recovery.

The project is part of the group’s phased plans to invest over US$450 million into the expansion of its diamond operations with construction of the underground mine expected to cost US$400 million.

Group chairman, Saleem Beebeejaun, in a statement of group financials for the year ended December 31, 2022 said plant recoveries are forecast to stabilise at Cam & Motor Mine going forward as the mine has now gained considerable understanding of the operating modalities of the BIOX plant.

“The Group is also benefiting from the pool of skills from the various experts that were brought in to train our technicians. However, power supply remains a major threat to the Group’s operations,” he said.

He added the group is focusing on back-up power generators across the mines albeit this will be at a significantly high operating cost.

“In the medium to long term, the group continues to pursue its pipeline power projects, with particular focus on solar energy, which will be a lasting solution to the power challenges for the mines,” said the chairman.

Beebeejaun said notwithstanding the positive contributions of the two projects to the group’s production, the company continued to suffer from acute power supply challenges, which significantly weighed down the group’s efforts to increase production volumes.

He said foreign currency challenges and exchange rate distortions also continued to negatively impact the Group’s profitability.

In terms of group performance, gold production recorded a 17 percent decline to 929kg from 1122kg produced in the prior year.

Beebeejaun said subsequent to the commissioning of the BIOX plant at Cam & Motor Mine, the group focused on optimising the plant to bring it to nameplate capacity and eliminating teething challenges hence production was subdued.

Dalny Mine was placed under full care and maintenance during the year, which exacerbated the decline in gold production for the current year.

The gold price remained firm and fairly consistent from the prior year and averaged US$1 766/ oz for the year compared to US$1 774/oz in the prior year.

However, the group’s revenue for the year was $20,6 billion, which was an increase from the prior year’s revenue of $5,8 billion despite the decline in gold production mainly due to the depreciation of the local currency against the United States dollar.

On the group’s gold business, power supply challenges worsened at Renco Mine in the current year, which significantly cut back production running time.

Resultantly, gold production dropped by 28 percent from prior year’s production of 561kg to 402kg in the year under review.

“The group is focusing on back-up generators to lessen the negative impact of acute power supply deficits to the mine despite the higher operating costs these come with,” said the chairman.

Dalny Mine was placed under full care and maintenance from the beginning of the year after it ran out of open pit resources that could be mined economically at sustainable grades.

Consequently, there was no production during the current year which is in contrast to the 209kg produced in 2021 when the mine was fully operational.

“In order to reduce the cash flow impact of the fixed care and maintenance costs, the mine embarked on small scale mining operations, which were at an advanced stage as at year end,” said Beebeejaun.

At One-Step Mine, the group was focused on the resumption of mining operations at the Cam & Motor pits in preparation for the running of the BIOX plant, which was at completion stage at the beginning of the year.

Consequently, mining operations at OneStep were discontinued at the close of 2021 hence no gold was produced from One-Step in the current year.

Beebeejaun said the group continues to evaluate all available options for the future exploitation of its One-Step resource.

He said Cam & Motor Mine mining operations commenced from the refractory sulphide Cam & Motor pits as the year started to pave the way for the commissioning and bringing into production the BIOX plant.

The BIOX plant was successfully brought into production from February 2022 in test mode and successfully commissioned in April 2022.

“The plant experienced some teething challenges which were successfully resolved as the year progressed.

“The mine therefore produced 527kg for the year thus achieving a 50 percent growth compared to 351kg produced from One-Step mining operations in the prior year.

“Despite this, the plant operated well below its capacity due to supply challenges as with our other operations,” said Beebeejaun.

In terms of the base metal business, the refinery operated under care and maintenance throughout the period and there was no traction in the current year on the company’s efforts to secure raw material feed for the refinery.

The chairman said engagements to secure potential sources of raw material are continuing and stakeholders will be kept informed.

“Meanwhile the refinery continued with its various cash generating projects to maintain the integrity of the plant and to fund some of its care and maintenance costs,” he said.

On chrome business, the legal dispute relating to the company’s chrome claims in Darwendale still awaited finalisation by the courts as at year end.

RZ Murowa managed to successfully complete and bring to production its Project Crown Jewel 500tph plant in the second half of the year.

Beebeejaun said the forecast production upside from the plant will, however, only reflect subsequent to year end as focus in the current year was on stabilising and optimising the plant.

“Production for the year therefore, marginally increased by 3 percent to 426 000 carats compared to the 2021 production of 414 000 carats.

“There were no mining activities from the pits and material processed was obtained from the pre-mined low grade and tailings stock piles,” he said.

The chairman said the Associate continues to expand its exploration activities including detailed evaluations on extending the life of its pits to further extend life of mine.

He said the Associate continues to contribute to the overall profitability of the group as share of profit from the Associate was $102,1 million whilst the prior year’s profit contribution was $525,8 million.

On the Energy Business, the 178MW solar project progress had been stalled due to the Covid-19 pandemic with traction only recorded in obtaining all the regulatory requirements for the implementation of the solar projects across the group’s mines.

Beebeejaun said the group has since resumed engagements with various potential funding partners after the relaxation of the Covid-19 protocols worldwide.

He said the group remains optimistic of reaching financial closure for the solar projects, the 2 800MW Sengwa Power Station.

He added the company continued its engagements with various stakeholders during the year for potential partnerships on this project.