adminRESOURCES group RioZim Ltd has reopened its gold mining unit Cam and Motor in Kadoma, 50 years after the mine ceased operations, chief executive Mr Noah Matimba has said.
This follows the group’s successful US$10 million cash call in June.
Cam and Motor closed in 1968 after having hauled 150 tonnes during its subsistence. The unit is seen as key to boosting RioZim Ltd’s fortunes.
Mr Matimba said the Kadoma mine had capacity to produce 4 000 ounces of gold monthly.
From the proceeds of the rights issue, RioZim Ltd is also considering building a new gold plant at Eiffel Flats, restarting ferrochrome production for export at the Maranatha smelter and chrome mining at Ngezi.
Production at Renco Mine is being ramped up.
In total, the projects should create 1 000 jobs through 2016, said Mr Matimba.
“The plan is aimed at closely following the value addition and beneficiation cluster of ZimAsset by processing raw chrome ore to produce ferrochrome for export, and also the cluster of social services and poverty eradication by providing technical support to about 200 small-scale and artisanal chrome miners,” explained Mr Matimba in e-mailed responses.
RioZim Ltd is “working extremely hard” to find funders for its planned 1 400 megawatts thermal power project at the Sengwa coalfields in western Zimbabwe, he said.
An estimated US$2 billion is needed to get the project running.
“We are looking for bankable customers with whom we can enter into power purchase agreements and then finance the project,” Mr Matimba said.
The group is looking to boost production following Rio Tinto Plc’s recent exit.
Rio Tinto earlier this year sold its 70 percent stake in Murowa Diamonds, and another 50 percent in Sengwa Coal, to divest from Zimbabwe’s mineral sector, leaving GEM RioZim Investments as majority shareholders.
Management is confident of the business’s prospects going forward.
“Rio Tinto Plc decided that RioZim is in a better position to manage, nurture and grow these assets.
“We agree that these assets, along with others, are best managed by a local company such as RioZim. We know the environment better and will focus more closely and effectively on these assets.
“We believe that the sale by Rio Tinto will eventually have a positive impact on the share price of RioZim as we hope to improve the combined performance of the businesses through opportunities for localised synergies,” said Mr Matimba.
RioZim Ltd – with interests in gold, diamonds, coal, nickel and copper smelting – last year saw losses widening to US$18,5 million from US$4,7 million in 2013.
Gold production at Renco Mine rose six percent to 648kg from 613kg a year ago.
A fortnight ago, Murowa Diamonds reported production in the first half of 2015 plunged 50 percent to 99 000 carats compared to 196 000 carats achieved in the same period in 2014.
On a year-to-date basis, RioZim’s shares had dropped seven percent to USc14 last Thursday.
In the past 52 weeks, the stock has touched a low of USc7 and a high of USc26.
Online Reporter