Incessant power cuts which commenced this year has resulted in a reduced production on one of Zimbabwe’s mining giant’s Half-year to 30 June 2019, RioZim Group Chair Saleem Rashid Beebeejaun revealed.
Energy authorities this year introduced load shedding citing low water to generate electricity at Kariba Power plant and also breakdowns on archaic machinery being used on Hwange thermal power Stations as well as other small energy producers.
“As a direct result of these power cuts, the Group, recorded a decrease in its production by 8% to 962kgs from 1 050kgs achieved in the comparative period in 2018,” Beebeejaun says.
The government’s move to import electricity from neighbouring South Africa and Mozambique have however not managed to alleviate power cuts as load shedding continued.
Besides power cuts, RioZim has also faced challenges due to foreign currency shortages.
The company chairman says the shortage of the US Dollar is impacting working capital, maintenance and expansion capital expenditure.
“The Company is now back to paying for almost everything in US Dollars and is therefore extremely short of US Dollars,” Beebeejaun says.
“In the absence of either being allowed to retain and use 100% of its export proceeds or raise and use US Dollars from shareholders, the Company’s position will continue to be extremely challenging.”
RioZim, in terms of performance in the Half Year to 30 June 2019, recorded a ZWL$38.2 million at ZWL$136.7 million in revenue.
“This low revenue achievement is mainly attributable to the decrease in gold production associated with the incessant power cuts experienced during the period under review,” Beebeejaun says.
“The gold price however firmed up to an average of USD1 346/oz against USD1 298/oz recorded in the same comparative period in 2018, and this, provided a cushion on the lower production volumes.”
“The Company also benefited from the combined effect of lower costs in USD terms for its very limited Zimbabwean Dollar denominated costs which resulted in the Group recording an operating profit of ZWL$46.9 million,” explained Beebeejaun.