Last week, the listed resources group announced it was planning legal action against the central bank over failure to meet its obligation to make foreign currency available, saying the situation was choking its business.
RIOZIM says Empress Nickel Refinery (ENR) has commenced production of matte and copper anodes as part of a programme to resuscitate the mothballed plant.
The refinery was put under care and maintenance in 2015 due to the unavailability of matte ― a semi-processed ore.
Lovemore Chihota, Riozim’s board chairman, said ENR was able to produce 369 tonnes of matte and 14,5 tonnes of copper anodes, generating $2,3 million in the half year to June 2018.
“This was a significant step for the refinery as there was no production in the comparative prior period. With successful partnerships and continued commitment, the group anticipates that ENR will be able to wean itself out of care and maintenance in the near future,” he said in a comment accompanying the group’s financial statements.
The refinery, however, remains under care and maintenance.
“Notwithstanding the care and maintenance status, the smelter and other sections of the refinery were kept in operation in order to continue to preserve the assets and generate sufficient revenue to at least meet the care and maintenance costs,” Chihota said.
ENR is a strategic asset for the group and the country as it has the potential to generate significant amounts of foreign currency once its operations fully resume.
The listed resources group said it has plans to upgrade the refinery so that it can process material other than base metals.
In line with this, Riozim is currently exploring various methods of upgrading the refinery so that it is able to beneficiate lithium concentrates in light of the huge investor appetite to exploit lithium in the country.
“The success of these initiatives and indeed the overall operation depends heavily on our ability to access the much needed foreign currency that we generate during 2018. Every effort is being made to this effect,” he added.
These plans will, however, undoubtedly be frustrated by the foreign currency crisis.
Last week, the listed resources group announced it was planning legal action against the central bank over failure to meet its obligation to make foreign currency available, saying the situation was choking its business.
The group’s revenue for the half year grew by 17 percent to $44,4 million from the $37,8 million realised in the prior comparative period. The revenue growth came on the back of an 18 percent increase in gold sales to 1 007 kgs, from 852 kgs in 2017, as well as a five percent increase in the gold selling price, which averaged $1 298 per ounce, from $1 238 in 2017.
Overall, in the first half of the year, the group realised a profit after tax of $206 000, which was a significant decline from a profit of $2,9 million in 2017. The profit was achieved on the back of gain on bargain purchase of Palatial Gold Investments (Private) Limited.