Resources group RioZim Limited says power supply remains a major threat to the Group’s operations and focus for the year is to look for stability across all its operations to ensure consistent plant throughput.
The Group is already focusing on back-up power generators across the mines albeit at a significantly high operating cost.
RioZim is an integrated mining and metallurgical company in Zimbabwe with an extensive portfolio of resources in gold, base metals, diamonds, coal and chrome.
Its mining operations include Renco Gold Mine in Masvingo Province, and Cam & Motor Gold Mine and Empress Nickel Refinery; both in Mashonaland West Province.
RioZim also has interests in Sengwa Colliery (Private) Limited with coal assets in Gokwe North; Murowa Diamonds (Private) Limited with operations in Zvishavane; and Marnatha ferrochrome refinery in Kadoma.
In a trading update for the quarter ended March 31, 2023, the Group said it continues to invest in alternative power supply albeit coming at a higher cost of production.
“In the medium to long term, the Group continues to pursue its pipeline power projects, with particular focus on solar energy, which will be a lasting solution to the power challenges for the mines,” said Riozim.
However, the group has over the years pinned its power supply hopes on the 2 800MW Sengwa Power Station.
China’s Industrial and Commercial Bank of China (ICBC) had planned to finance the coal-fired power plant for US$3 billion, but later withdrew citing environmental problems.
Following the withdrawal of ICBC, there have been no takers for the project. RioZim in its 2022 financials said it had set up new financing options to attract potential investors for its 2 800 MW Sengwa Power Station project.
“The company continued its engagements with various stakeholders during the year for potential partnerships on this project and our stakeholders will be timely informed on any further developments,” group chairman Saleem Rashid Beebeejaun said in a commentary.
According to the group’s trading update, the operating environment for the quarter under review continued to be challenging as inflation and exchange rates depreciated.
Power supply challenges also worsened as the country experienced acute load shedding, which negatively impacted productive industries as alternative power sources come at a high cost of production, putting pressure on profitability and business sustenance.
In terms of operations, Cam & Motor Mine production increased by 92 percent from the comparative prior year’s first quarter.
“This was on the back of the Biological Oxidation (BIOX) plant that came into operation in Q2 2022, which has enabled the mine to upscale production volumes.
“Despite the notable improvement in production from the prior year, production from the BIOX plant is currently operating below name plate plant capacity and the focus in the current year is to continue upscaling production to the full capacity of the plant,” the company said.
Dalny Mine mine operated under full care and maintenance throughout the quarter. However, the mine embarked on small scale mining operations to reduce the cash flow impact of the fixed care and maintenance costs and production is expected from Q2, 2023. At Renco Mine production fell by 2 percent from the same period in the prior year. However, power supply challenges worsened during the quarter due to load shedding and unstable power infrastructure.
“The mine is focused on stabilising power supply to the mine to achieve stable production and various initiatives are being pursued including, among other efforts, investment in additional generators to increase capacity and coverage of the key activities in the mine’s production critical path,” read part of the trading update. The Empress Nickel Refinery (ENR) remained under care and maintenance throughout the quarter.
The Group’s Associate, RZM Murowa (Private) Limited recorded a 20 percent increase in production compared to the same period in the prior year due to increased throughput and plant capacity after commissioning the 500tph plant in Q3 2022.
The group heighted that the mine continues to process material from its low grade stock piles and is also expanding its exploration activities which are mainly centred on extending the life of its pits with a view to resuscitate mining operations in the current pits.