Gold output at RioZim fell 27% last year due to low-grade ore at its flagship operation Cam & Motor and breakdowns at the smaller Dalny mine.

Gold production fell from 1.66 tonnes in 2019 to 1.21 tonnes in 2020, the company said.

“Throughout the current year, the group’s flagship operation Cam & Motor Mine carried out mining activities from the nearby One Step Mine hauling low grade ore to the Cam & Motor plant for processing. This resulted in a drastic fall in gold production compared to the prior year when the Mine processed higher grade ore from its Cam pits,” RioZim said in an earnings report.

However, higher gold prices offset the impact of lower production. During the year, prices averaged US$1 765/oz, 27% higher than 2019’s US$1 395/oz.

The company swung to a net profit for the year from a loss in 2019.

Renco Mine improved output by 4% to 580kgs, benefitting from the strategy to increase milling throughput. But production at Dalny Mine fell sharply by 46% to 198kgs due to major breakdowns in the milling section of its ageing plant.

On the regulatory side, the forex auction system brought some relief, but gains were reversed by tighter export retention requirements announced this year.

“The review upwards by the Central Bank of the gold retention to 70%, coupled with the replacement of the fixed exchange rate with a foreign currency auction determined rate towards the end of the first half, were welcome developments which had a positive impact on the Company in the second half of the year,” RioZim says.

However, in January, central bank started giving exporters just 60% of their earnings, which, RioZim says, “has left the company in an extremely challenging position arising out of the markedly reduced amount of requisite foreign currency required for the basic continuation of operations”.

COVID-19 hit RioZim’s expansion plans, both for the BIOX plant, and for its energy projects.

Plans to secure funding for the first phase of the 2 800 MW Sengwa power project “were significantly hampered by the uncertainties presented by the COVID-19 pandemic”. The company is progressing with selecting an EPC contractor for the 178MW solar projects for its mines, and is waiting for finalisation of Power Purchase Agreements with ZETDC.