Published: 04 June 2025

Struggling mining company RioZim Limited is reportedly in advanced discussions with a potential investor for an initial US$20 million injection aimed at revitalising its cash-strapped operations, the company confirmed in a recent statement.

The announcement comes amid growing financial turmoil for the resources group, which has been battling mounting debt of nearly US$200 million and a deteriorating liquidity position that has severely impacted its ability to meet obligations to suppliers, workers, tax authorities, and utilities.

In April, the Zimbabwe Diamond & Allied Minerals Workers Union (ZDAMWU) petitioned the High Court to place RioZim under corporate rescue due to insolvency and governance challenges. The union's move underscored the dire state of the miner, whose total liabilities exceeded its assets by at least US$11 million as of June 30, 2024.

In a statement, RioZim's board advised shareholders and the investing public that following a cautionary announcement in March 2025, major shareholders are negotiating with an investor who plans to inject US$20 million into the company's working capital via a suitable financial instrument. The investor is also expected to acquire a majority stake in RioZim.

"The transaction is subject to due diligence, the signing of sale and purchase agreements, and obtaining the necessary regulatory and shareholder approvals," the company said.

"Following completion, the investor will comply with Zimbabwe Stock Exchange regulations by making a mandatory offer to minority shareholders."

RioZim attributed its poor liquidity to several challenges, including soaring production costs, frequent power outages limiting operational capacity, exchange rate fluctuations, plant breakdowns causing costly downtime, and management missteps.

The company also revealed it had taken legal action in response to ZDAMWU's corporate rescue application.

Despite a 40% surge in gold prices year to date, RioZim has struggled to capitalise on this upswing. The miner's excessive borrowing from related parties, which it has struggled to repay, has only worsened its debt burden.

RioZim's mining portfolio includes the Renco, Cam & Motor, and Dalny gold mines, as well as an associate company, RZM Murowa (Private) Limited, which produces diamonds. The company also owns RioBaseMetals, which operates the Empress Nickel Refinery.

As the company seeks to stabilise its finances and restructure its operations, stakeholders remain hopeful that the potential investor's involvement will provide the much-needed boost to return RioZim to profitability and growth.
- NewsDay

You might also want to read this

• RioZim faces corruption probe
• RioZim in eye of financial misconduct, fraud storm
• Struggling RioZim seeks US$200m reboot capital
• RioZim in firing line over US$5m power debt
• Crippling power cuts afflict RioZim
• RioZim makes appointments
• RioZim records net loss of US$2,3m
• RioZim sues RBZ over US$ payments
• RioZim H1 gold output rises
• RioZim loses court case