DEBT-LADEN miner, RioZim Limited, is in talks with a potential investor to secure working capital of US$20 million to resuscitate its dwindling operations, it has been revealed.
In April, the Zimbabwe Diamond & Allied Minerals Workers Union (ZDAMWU) petitioned the High Court to place the firm under corporate rescue, citing deep insolvency and governance failures.
The action came amid revelations that the resources group had rising debt obligations of nearly US$200 million due to a deteriorating liquidity position.
The deteriorating liquidity position left the firm unable to meet its obligations to its suppliers, workers, tax authorities and utilities.
RioZim’s total liabilities surpassed its assets as of June 30, 2024, by at least US$11 million.
“The directors of RioZim Limited wish to advise its shareholders and the investing public that, further to the cautionary announcement dated March 4, 2025, the major shareholders are now at an advanced stage in negotiating with the potential investor, who will inject an initial amount of US$20 000 000 into the working capital of the company through an appropriate financial instrument while completing a purchase of the majority shares of the company,” RioZim said in a statement.
“Shareholders are advised that the said transaction remains subject to the completion of due diligence, signing of the sale and purchase agreements, and obtaining any required regulatory and shareholder approvals. Upon conclusion of the transaction, the investor will follow the relevant rules of the Zimbabwe Stock Exchange for making a mandatory offer to the remaining minority shareholders to purchase their shares in the company.”
RioZim’s poor liquidity generation was attributed 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.
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RioZim told shareholders of ZDAMWU’s application for the company to be placed under corporate rescue, saying it has taken the “necessary legal steps in dealing with the said application accordingly”.
The turmoil faced by RioZim has seen the resources group missing out from the gold price boon. Prices for the yellow metal have surged by over 40% year to date.
As reported in early May, RioZim also borrowed more than it could pay back from related parties, which added to its massive debt overhang.
RioZim manages the Renco, Cam & Motor and Dalny mines under its gold portfolio, and RZM Murowa (Private) Limited, an associate of the firm, which produces diamonds.
The miner also owns RioBaseMetals, comprised solely of the Empress Nickel Refinery.
