RioZim posts $2.3 million loss

By Chipo Musoko, HARARE, August 7 (The Source) – Zimbabwe Stock Exchange-listed mining concern, RioZim has posted a $2.3 million loss for the half-year ended 30 June 2013, an improvement on the $4.9 million loss recorded last year on the back of high interest costs and declining metal prices.
“Despite debt rescheduling interest costs continue to be an enormous burden,” said the group’s chairman, Elisha Mushayakarara in a statement.
The mining company continued to be saddled by a $91 million debt.
Interest cost in the first half amounted to $4.4 million compared to $6.3 million in the prior year.
Earlier this year, Rio Tinto announced its intention to sell off its 78 percent stake in Murowa Diamonds, which weighed down the group’s performance but later put its plans on hold citing failure to find the right buyers. RioZim owns the remaining 22 percent.
Mushayakarara said recent weak metal prices were posing a threat to the viability of many mining operations.
Gold prices fell from an average of $1 651 per ounce in the first half of 2012 to $1 196 per ounce in June. The price averaged $1 497 per ounce for the first half of 2013.
Despite the disruptions and falling metal prices, the group’s operating profit grew 47 percent to $2.2 million up from $1.5 million during the same period last year.
Group revenue grew by 83 percent over the comparative period on the back of improved performance by subsidiary Empress Nickel Refinery(ENR). ENR recorded a revenue 204 percent in revenue.
Renco’s average monthly gold production grew 42 percent compared to the monthly average in the first half of 2012 despite disruptions experienced at the beginning of the year.
“As a result less gold was produced than expected,” Mushayakarara said.
He said plans to install a 20 tonne per day oxygen plant were at an advanced stage with the shipment having arrived in Beira.
“The installation of the new plant is expected to result in monthly savings of approximately $300 000 as well as eliminate the plant stoppages that were occurring when the liquid oxygen supplier was struggling to cope with demand,” he said.
He said plans for the re-commencement of mining operations at the Cam and Motor mine were progressing well and that the company was in the process of acquiring a 1 000 tonne per day plant with production expected to commence by the second quarter of 2014.