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RioZim Limited, once a stalwart of Zimbabwe’s mining sector, has reported a severely deteriorating financial position, with its net loss widening by a striking 81% during the first half of 2025, Mining Zimbabwe can report.
By Rudairo Mapuranga
The company’s interim financial results depict an operation in profound distress, unable to capitalise on a period of historically high gold prices due to crippling production declines and systemic operational failures. Despite a recent capital injection and a comprehensive management restructuring, the company is grappling with material uncertainty regarding its ability to continue as a going concern. This precarious position is underscored by a severe liquidity crisis, where current liabilities exceed current assets by a substantial ZWG 2.9 billion, and total equity has plunged to a deficit of ZWG 1.20 billion.
The company’s financial performance shows a deeply troubling trajectory. RioZim’s net loss expanded to ZWG 300.6 million for the six months ended June 2025, a significant increase from the ZWG 165.7 million loss recorded in the same period of 2024. This alarming deterioration was accompanied by a catastrophic collapse in revenue, which fell by 92% to a mere ZWG 21.6 million, down from ZWG 282.5 million in the prior comparative period. This financial erosion per share accelerated, with basic and diluted loss per share rising to 241.00 cents, compared to 135.59 cents in the first half of 2024. The independent auditor’s review report explicitly highlights a “Material Uncertainty Related to Going Concern,” pointing to the net liability position and recurring losses as conditions that cast significant doubt on the group’s future.
The root of this financial calamity lies in a comprehensive operational breakdown across RioZim’s mining portfolio. The company’s gold production had already fallen by 27% to 306 kg during the first half of 2024, and this downward trend persisted into 2025. The flagship Cam & Motor Mine experienced a 42% production decline to 130 kg, plagued by ore supply challenges and delayed pit development. Renco Mine saw a 9% production drop to 176 kg, while Dalny Mine remained entirely on care and maintenance. This operational performance stands in stark contrast to competitors like Padenga and Caledonia, which managed to thrive under similar national conditions, producing 1,351 kg and 1,072.2 kg of gold, respectively. The company’s inability to benefit from a favourable gold price environment, with the average price strengthening from US$2,165 per ounce in 2024 to US$3,075 per ounce in 2025, underscores the depth of its operational crisis.
The challenges extended beyond its gold operations. RioZim’s associate, RZM Private Limited, which operates the Murowa Diamonds project, experienced a dramatic swing from profit to loss. The associate reported a share of loss of ZWG 28.0 million for RioZim, a stark reversal from the share of profit of ZWG 5.6 million in the prior period. This downturn was driven primarily by continued pressure from depressed international diamond prices, which severely impacted both profitability and cash flows. In response, operational activity at Murowa remained subdued as the mine concentrated on cost containment and optimisation, though it has commenced a strategic shift to in-pit mining aimed at improving the grade of ore processed.
In the face of this multifaceted crisis, RioZim’s chairman, Caleb Dengu, identified “persistent undercapitalisation over the past three years” as the fundamental cause of the company’s inability to sustain production and invest in essential infrastructure. This long-term financing constraint prevented necessary maintenance and modernisation, with a key inflection point occurring in 2019 when ore at Cam & Motor Mine shifted from oxide to refractory sulphide, necessitating a substantial US$35 million capital investment for processing infrastructure that the company could not self-finance.
The company has initiated a vigorous response to these challenges. A comprehensive restructuring exercise included the appointment of an entirely new board in July 2025. This leadership change has already yielded tangible results, most notably the successful reopening of Renco Mine, which has safeguarded the jobs of more than 1,000 workers. Furthermore, the company progressed to advanced negotiations with a strategic investor, a transaction that was successfully concluded after the reporting period, resulting in the injection of much-needed funding. Efforts to fully restore operations at the critical Cam & Motor Mine are also well underway, with full-scale production anticipated before the end of 2025.
However, RioZim’s path to recovery remains fraught with legal and operational hurdles. A stakeholder has applied to the courts for the group to be placed under corporate rescue proceedings, creating significant uncertainty. The Zimbabwe Diamond and Allied Minerals Workers Union further complicated matters by rejecting a US$160,000 settlement offer from RioZim to withdraw its corporate rescue application, with the union maintaining that corporate rescue is the only viable mechanism to save the company from total collapse. This stands in stark contrast to the company’s historical performance, when it once produced over 2,000 kilograms of gold annually as Zimbabwe’s third-largest gold producer—representing a catastrophic decline of approximately 85% in production volume over an eight-year period.
RioZim now stands at a critical juncture, balancing between potential recovery and corporate collapse. The 81% widening of losses to ZWG 300.6 million during the first half of 2025 represents the culmination of years of operational decline and systemic underinvestment. While the recent capital injection and board restructuring offer a vital lifeline, the company’s deeply negative equity and ongoing corporate rescue proceedings create substantial headwinds to recovery. The success of RioZim’s turnaround strategy hinges entirely on the successful ramp-up of production at both Renco and Cam & Motor mines, the stabilisation of its financial position through strategic funding, and the favourable resolution of its legal challenges. With gold prices projected to remain at elevated levels, RioZim has a narrow window of opportunity to align its restored operational capabilities with favourable market conditions, but the path to sustainable recovery remains fraught with uncertainty.
