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RioZim is negotiating the term sheet for a $45 million facility with an international financier to refinance the group’s bank debt, which now stands at $40 million, managing director Ashton Ndlovu told the annual general meeting yesterday.
He said the group would be able to significantly reduce its average cost of funding, which had been reduced to 19 percent at the end of last year from 21 percent in 2012. The financier had offered to guarantee country risk on the entire debt.
Turning to the group’s operations, he said RioZim had lost a third of its production at Renco in the first quarter to flooding after they received a season’s rainfall (800mm) in two weeks. The group was looking to spend $700,000 in development capex to improve grade and gold production and was also negotiating with ZEDTC to reduce electricity tariffs.
A contract had been signed with a contractor to treat 80,000t of dumps at Renco. RioZim was also moving on with its plans to develop its opencast mine at Cam & Motor in Eiffel Flats. A Chinese company was in the process of setting up a 1,500 tonnes a day treatment plant and production would start in the fourth quarter of 2014.
At Empress Nickel Refinery, the group had received only 30 percent of its matte supplies from BCL, which was forced to declare six force majeures as BCL suffered from boiler problems. To this end, BCL would shut down its operations on June 18 for a month to repair 49km of tubing in the boilers, which should result in a consistent supply of matte on resumption.
“With a consistent matte supply, the refinery is profitable business,” he said. RioZim had also engaged Canadian consultants to investigate and upgrade its treatment of high sulphur matte, which would reduce reliance on Botswana and it would allow the group to take high matte sulphur matte from Zimplats.
Ndlovu added that the group would be able to beneficiate PGM matte at 10 percent of the estimated $3.6 billion cost of setting up a new platinum refinery. He noted that payback on the oxygen plant was a mere four months and the group was saving $300,000 a month following the installation of the plant imported from India.
The restructuring of the group into industry specific sector to attract investment into focused areas — gold, chrome, diamonds, base metals and energy — was almost complete. An Italian group was looking at becoming a strategic partner in RioChrome and he noted RioZim still had pre-emptive rights over the diamond assets of Rio Tinto Plc.
Bhekithemba Nkomo had been appointed CFO in the year.
derick.khumalo