Online Reporter
Business Reporter
RioZim, one of Zimbabwe’s biggest miners, says a successful turnaround is “definitely possible” despite facing significant financial challenges, asserting that restoring confidence among its key stakeholders remains the group’s paramount objective.
The company’s well-being is critical given the strategic importance of mining in Zimbabwe, the country’s largest source of exports.
RioZim is also involved in gold, nickel, copper, coal and diamond mining, making it a significant player in Zimbabwe’s resource sector.
Zimbabwe’s mining sector is projected to grow by over 7 percent in 2025, driven by strong performances in gold and coal production, among others. This growth is expected to translate into a significant increase in revenue, reaching US$6,2 billion, up from US$5,9 billion in 2024
RioZim has since implored the Zimbabwe Diamond and Allied Workers Union (ZDAMWU) to cease what it terms “hurdles” to its revival, arguing that the union’s recent court application to place the company under corporate rescue is hindering its recapitalisation efforts and delaying a crucial payment plan for employees.
In an interview, RioZim chief executive Mr Rajgopal Swami said that the diversified resource firm was “at the cusp of a breakthrough”, just days away from presenting a “secure payment plan along with a substantial down payment” to its employees.
This was now delayed by the union’s move into file an urgent court application trying to stop the company from following the necessary internal and regulatory processes to seek the necessary approvals and authorisations.
He acknowledged stakeholder concerns, committing to address them through transparency, accountability and consistent engagement.
Mr Swami emphasised that the company’s future hinges on unity and a shared commitment to long-term recovery, urging all stakeholders, including workers, shareholders and creditors, to collaborate towards recovery and growth of the company, which would yield results for all.
“We are actively implementing a long-term recovery strategy, including the pursuit of funding initiatives and operational restructuring,” said Mr Swami.
“These efforts aim to stabilise operations, meet employee obligations and ensure the sustainability of the business.
“Our people are the foundation of RioZim’s resilience. We remain unwavering in our commitment to protect jobs, fulfil our obligations and secure a stable future for our workforce and their families.
“We ask our employees to stand strong and united as we work through this recovery journey together.
“We urge all employees to remain focused and not be distracted by misinformation or unrealistic promises.”
The multicommodity firm is grappling with severe financial and operational challenges that have significantly hindered its growth since 2022.
Despite operating two gold mines, Cam and Motor (open-pit) and Renco (underground), which have seen the gold price enjoy strong growth on international markets due to uncertainties in the global economy, it has been hampered by several factors, including limited local lending capacity.
A key issue for RioZim stems from a geological shift at its flagship Cam & Motor Mine. In 2019, the ore changed from oxide to a refractory sulphide, necessitating a substantial US$35 million capital investment for infrastructure changes that the company had limited scope to finance.
Extensive efforts to secure long-term funding, both locally and internationally registered limited success.
Local lenders offered only short-term loans, while external funders were deterred by a lack of understanding of the country’s circumstances and perceived country risk, even when funding was secured against gold exports through an agreement with Fidelity Gold Refineries.
The reliance on short-term financing for a capital-intensive programme has severely disrupted RioZim’s working capital cycle and diverted focus from crucial ancillary infrastructure.
While new BIOX and flotation plants were commissioned in April 2022, a lack of funds prevented necessary pit optimisation and upgrades to associated critical infrastructure such as crushers, mills, tanks, pumps and allied piping.
This imbalance has led to inconsistent ore feed, reduced productivity, accelerated equipment wear and tear, and increased maintenance needs.
Furthermore, persistent funding constraints have hindered normal mine development, exploration activities and efforts to increase the resource base and mine life, ultimately leading to a drop in both grade and recoveries.
In response to these capitalisation challenges, RioZim has launched a capital-raising initiative to recapitalise the business and stabilise production. The company is actively engaging potential investors interested in gold loan facilities (prepayments), asset sales, or equity investments.
The firm is actively strengthening internal controls, improving stakeholder communication and providing regular updates on operational progress and financial recovery plans. These efforts, according to RioZim, are aimed at rebuilding trust and reaffirming its commitment to long-term sustainability.
Mr Swami highlighted the vital importance of protecting its 1 764 employees across Renco Mine, Cam & Motor, support services and other projects.
The workforce collectively supports an estimated 8 000 dependents, underscoring the significant socio-economic impact of the company’s operations.
He added that any asset divestment would also look at ensuring that the employees are provided security of employment by any new buyers under the same terms and conditions, with service continuation.
Mr Swami stressed that its commitment extends beyond settling outstanding dues, with the core of its business plan focused on job preservation and the creation of sustainable employment opportunities for surrounding communities.
“Our commitment goes beyond the settlement of outstanding dues. At the core of our business plan is the preservation of jobs and the creation of sustainable employment opportunities that empower the communities surrounding our operations,” said Mr Swami.
