With global gold prices reaching record highs, losses are rare among gold miners. But RioZim, crippled by equipment breakdowns and high costs, is bucking the trend and missing out on the price boom.
The company suffered a 27% drop in gold production from its three mines at the half-year. RioZim runs three aged gold mines; Renco in Masvingo, as well as Cam & Motor and Dalny in Kadoma. Combined, the mines produced just 306kg over the period, down from 417kg in the same period in the prior year.
For RioZim, gold prices averaged US$1,910 per ounce in the first half of last year, rising 13% to an average of US$2,165 13% over the same period this year. But the rising prices were only good to cushion RioZim from further losses, and not to help it make a profit.
The gap between RioZim and other gold mines is widening. At 306kg, the output from RioZim’s three mines for the six months is lower than the 540kg produced by Caledonia’s sole gold producer, Blanket, in the three months to September. In the three months to June, Blanket increased production and controlled its costs. This more than doubled its gross profit; from US$10.9 million over the same quarter in 2023 to $22.9 million in the second quarter this year.
Another gold player, Dallaglio, which owns two mines, produced 1,351kg in the six months to June, a 25% increase in production. This is more than four times what RioZim produced over the same period. With higher production, Dallaglio took full advantage of higher prices – it grew revenue by 40% to US$87 million. Profits increased to US$13.6 million, 159% more than the same period last year. In contrast, RioZim made a loss, due to frequent plant and equipment failures.
At Renco Mine, gold production fell by 9% to 176kg. RioZim says the mine was “focused on refurbishment of plant structures and various equipment within the plant as equipment breakdowns were persistent”. At Cam & Motor, output was 130kg, a sharp drop of 42% from 223kg recorded in the same period in 2023. This was due to slow development of its pit areas. The mine has now had to engage contract miners at the site “to accelerate pit development and bring the current pit profile to plan”. Dalny Mine is closed and under care and maintenance. RioZim hopes to start small-scale operations there.
