Auditors Raise Serious Concerns Over RioZim’s Financial Health

An independent auditor’s report has raised serious concerns about RioZim’s ability to continue operating, highlighting that the company’s liabilities are greater than its assets, making it technically insolvent.

When auditors flag “material uncertainty” over a company’s “going concern” status, it means they doubt the company can keep operating for at least the next year. This conclusion follows a thorough assessment of the company’s financial health and whether it can meet its obligations.

RioZim’s financial statements for the year ending December 31, 2023, revealed a net loss of $95.9 billion and total liabilities exceeding total assets by $5.8 billion. These conditions prompted auditors to express doubts about the company’s future.

RioZim, which deals in gold, chrome, and diamond mining, saw a slight 1 percent increase in gold production to 940 kilograms this year. However, production was hampered by ongoing plant breakdowns, especially at the Cam & Motor Mine in Kadoma. Dalny Mine remained inactive and under maintenance.

The average gold price for the year was US$1,913 per ounce, up 8 percent from the previous year. Despite the increase in production and gold prices, RioZim’s overall revenue jumped to $216.1 billion, compared to $20.6 billion the previous year, partly due to favorable exchange rates.

Renco Mine adopted a “low grade-high volume” strategy, increasing production by 10 percent to 441 kilograms. However, power supply issues continue to hinder production, prompting the mine to invest in additional generators and explore alternative power sources.

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At Cam & Motor Mine, frequent breakdowns in the milling section led to a 5 percent drop in gold production, from 527 kilograms last year to 499 kilograms this year. The mine is now undergoing major repairs and focusing on pit development to improve gold recovery.

Dalny Mine, still under maintenance, produced no gold this year. It is seeking regulatory approval for small-scale operations to generate cash flow to help cover maintenance costs.

RioZim’s base metals refinery also remained under maintenance, contributing $314.2 million in revenue, which helped fund its costs. The company plans to revive the plant’s oxygen generation section to boost income.

A legal dispute over RioZim’s chrome claims in Darwendale remains unresolved, with the company aiming for a peaceful settlement.

Diamond production at RioZim’s associate, Murowa, dropped by 3 percent to 414,000 carats due to processing lower-grade stockpiles. This resulted in a $5.4 billion loss from the associate, compared to a $102.1 million profit last year.

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