THE Zimbabwe Diamond and Allied Minerals Workers Union (ZDAMWU) expects RioZim Limited’s board and management is set to lose operational control in the event that the union’s urgent corporate rescue application is granted.
The matter is pending before the courts.
On April 28, ZDAMWU filed an application at the High Court of Zimbabwe to place RioZim under corporate rescue, citing deep insolvency and governance failures.
The action was taken as the firm now has a massive debt burden, which the court application revealed to be at least US$191 million.
For the past five years, RioZim’s liquidity position has steadily deteriorated, with total liabilities surpassing its assets as of June 30, 2024, by at least US$11 million.
The poor liquidity generation was due to soaring direct costs associated with producing its minerals, power cuts that limited production scalability, exchange rate volatility, plant breakdowns that caused a lot of downtime and poor management decisions.
“The board that is disposing of the assets no longer has those powers in terms of the law.
“When a corporate rescue application has been filed, immediately the powers and function of the management and board of a company is suspended,” ZDAMWU general secretary Justice Chinhema told NewsDay Business in an interview.
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“So, the proposed disposition of the company assets being pursued in our view is unlawful and illegal, probably fraudulent.”
He was responding to RioZim efforts to seal major transactions that could reshape its financial future, with directors revealing that negotiations were in their final stages.
Statements dated May 29 and July 17, 2025 revealed that RioZim was in talks with a potential investor for a US$20 million working capital injection and planned to sell mining and non-core assets.
However, ZDAMWU blocked these efforts after the union approached the court for an interim order issued on August 5, 2025 to block any actions pending the determination of its main application.
Chinhema pointed out that the company should have paid its workers and cleared its debts.
As of March, RioZim had accrued a wages and salaries backlog of approximately US$5 606 054 after failing to pay its workers since October 2024.
“Why didn’t they pay workers’ salaries and clear the debts? Again, we believe this disposal is merely asset stripping aimed at frustrating the corporate rescue process,” Chinhema said.
“If genuine intention is there why not approach the court for consent corporate rescue that will be supervised and transparent for the benefit of everyone because we have lost trust with the management and board.”
He said all the proposed recapitalisation plans were not sound.
“They have not provided any sound plan going forward. We are not only focusing on outstanding salaries, but the future after payment of the salaries,” Chinhema said.
“What is the future of the company in the next two-, five-, and 10-year period? They have not demonstrated anything to guarantee continued employment of the correct workers and future workers, they have not demonstrated anything to guarantee economic stimulus in the communities where these mines are operating now.”
Chinhema said if the company wanted to help its workers, they should use proceeds from Dalny Mine to pay salaries.
