RioZim eyes gold production recovery after 27 percent decline

LISTED mining company, RioZim Limited, anticipates a recovery in gold production after experiencing a 27 percent decline in the first half of the year with the firm relying on the mobilisation of a mining contractor at the Cam & Motor Mine, which is expected to enhance pit development and ensure a sufficient ore supply to the plant.

The improvement in pit accessibility will avail better quality ore to the plant, which will have a positive impact on gold recoveries.

The mining concern said gold production is, therefore, forecast to improve as these initiatives start to make an impact in the second half of the year.

In the six months to June, the diversified Zimbabwe Stock Exchange (ZSE)-listed mining firm recorded a 27 percent decline in gold production to 306kg from 417kg achieved in the same period in the prior year.

“Low production was attributed mainly to Cam & Motor mine operating sub-optimally due to low plant throughput and depressed recoveries. These were brought about by mining and ore supply challenges to the plant due to lagging pit development,” Group chairman, Mr Saleem Beebeejaun, said in a statement of the financials for the period under review.

Renco mine also recorded lower gold production due to inconsistent plant performance. The gold price averaged US$2 165/oz, which was 13 percent in the positive from US$1 910/oz recorded in the comparative period.

Due to the decline in gold production, revenue for the period was ZWG282,5 million, a 20 percent decline from ZWG 352,4 million recorded in the same period in the prior year.

The company has noted that the favourable gold prices to some extent cushioned the group from the effects of lower production. Mr Beebeejaun noted that at Renco mine, they focused on refurbishment of plant structures and various equipment within the plant as equipment breakdowns were persistent.

As a result, the plant did not operate efficiently, which negatively impacted plant throughput. Due to the lower plant throughput, Renco’s gold production decreased by nine percent to 176kg from the 194kg recorded in the comparative period.

Since the beginning of the year, the mine put in place an alternative power supply arrangement to complement the power supply from the national power utility, which measures stabilised power supply to the mine.

The mine would continue to focus on plant stabilisation to ensure consistent throughput, which will cement the “high volume low grade” strategy necessary for Renco to produce optimally.

Cam & Motor mine Gold production, for the six months, dropped by 42 percent from 223kg recorded in the same period in 2023 to 130kg in the current period.

“The mine’s lower production was largely due to ore supply challenges to the plant. Pit development is currently lagging, which has resulted in the mine’s inability to access some areas of the pit,” said the official.

“Accelerated pit development is required to enable mining as per the pit design. The inability of the mine to access all areas of the pit had a negative effect on the quality of the ore as per the desired blending matrix resulting in low recoveries.”

Mr Beebeejaun said subsequent to the period’s end, the mine changed its mining strategy from owner mining to contract mining to accelerate pit development and bring the current pit profile to plan.

The initiative, he said, is expected to improve ore supply within a shorter time, which will bring stability to production.

Diamond production at Murowa (Private) Limited marginally increased by two percent to 216 000 carats compared to 212 000 carats recorded in the comparative period in 2023.

The increase in production was a result of improvement in the grades from the stockpiles, which the mine is currently processing.

Despite an increase in diamond production, Murowa recorded a decline in revenue and profitability due to a continued decline in diamond prices.

Consequently, the share of profit from the associate declined to ZWG5,6 million from ZWG12,8 million recorded in the comparative period. RioZim separated from Rio Tinto plc in 2004 and became a wholly owned Zimbabwean-owned company that also holds coal and nickel assets.

RioZim, through its subsidiary Rio Gold, acquired the Danly Mine from Palatial Gold Investment around 2017.