RioZim says to sue Reserve Bank of Zimbabwe for failing to pay it

The failure to access foreign currency has also hamstrung the company’s funding for capital projects, such as the Biological Oxidation Plant at Cam & Motor Mine,  which it needs to treat refractory ore as the near- surface oxidized ore was already depleted at the end of last year.

“Unless the Company is allowed to access adequate foreign currency to fund this project, it will not be able to build this plant thereby adversely affecting the viability of the mine,” says RioZim.

“There are other similar capex projects which are absolutely critical for the Company to sustain and grow its current production which have not been triggered as a result of foreign currency not being available. The lack of foreign currency has also started to have a significant negative impact on the Company’s ability to meet its projected targets.

“The challenge which the Company faces is that its revenues have shrunk leading to a severely depressed production whilst its cost base continues to fluctuate and like most mining companies, the Company’s costs are largely fixed and the Company can only benefit from increased production. Locally, costs have increased exponentially.”

RioZim is majority owned by GEM RioZim Investments, a unit of Harpal Randhawa’s Global Emerging Markets Limited, a $4 billion private equity and venture capital fund specializing in mezzanine, growth capital, buyout, and recapitalization investment.

It recorded its first profit since 2009  — when Zimbabwe abandoned its hyperinflation ravaged currency and adopted mainly the US dollar — of $2.5 million in the full-year to March last year after it sold its $34 million debt to the government-owned Zimbabwe Asset Management Corporation (Zamco).

The group’s gold operations include Cam & Motor, Renco Mine and Dalny Mine which it acquired from Falcon Gold last year.-The Source

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