Delayed Gold Payments Hamper RioZim Production
RioZim Limited (RioZim)’s gold production fell by 9 percent in third quarter ending 30 September 2020 as delays in payment of the yellow metal receipts by the Reserve Bank of Zimbabwe (RBZ) weighed heavily on the Group’s working capital, 263Chat Business has established.
Of its three gold units, only Renco Mine exceeded its 2019 comparative period production by 5% owing to improved milling throughput as Cam & Motor Mine and Dalny Mine suffered declines in output of 8 percent and 37 percent, respectively.
“The delays on the payment of the Company’s gold receipts by the Reserve Bank of Zimbabwe (RBZ), carried on throughout the quarter which severely strained the working capital and cash flows of the Group and greatly hampered production. The Company continues to engage the RBZ for a resolution of its delayed receipts,” the Group said.
In August, RioZim announced that it had received an insignificant part payment of the US$ 2,460,472 and ZWL$ 65,477,982 it was owed by the RBZ for gold delivered to Fidelity Printers and Refiners (FPR).
The Central Bank has been struggling to meet foreign currency payments as the country continues to grapple with foreign currency reserves.
However, the company had other challenges hampering production.
For instance, at Dalny Mine – the unit suffered multiple breakdowns from its ageing plant, which negatively affected production throughput resulting in a sharp drop in production of 37 percent.
Fortunately, international gold prices improved during the period enough to mitigate the impact of lower production.
“The gold price maintained its upward trajectory averaging US$1 879/oz for the quarter, which was 29% above the average price of US$1 457/oz for the same period last year. This helped to partly absorb the negative impact of the low production and increased costs during this period,” said the group.
At the Group’s Base Metals Unit, Empress Nickel Refinery (ENR) there was no production during the quarter as it remained under care and maintenance.
However, the Group’s associate Murowa Diamonds (Private) Limited recorded a 2 percent decrease in production compared to Q3 2019 due to processing ore from K1 pits which are of low grade whilst in the same period last year, where the Mine was processing from high grade K2 pits.