RIOZIM’s associate, RZM Murowa (Murowa) says its revenue and profitability were negatively affected by receding global diamond prices despite a slight uptick in production during the six months to June 30,2024.
Mining activities from the pits remained suspended as the company is currently engaged in extensive exploration targeted at extending the life of its pits.
Murowa saw a modest two percent increase in diamond production to 216 000 carats in the first half of 2024 (H1 2024), compared to 212 000 carats in the same period last year (H1 2023), thanks to better stockpile grades.
“The increase in production was a result of improvement in the grades from the stock piles which the mine is currently processing,” RioZim chairman Saleem Beebeejaun said in the company’s financials.
Even as Murowa struggled with suspended mining activities, the global diamond market added another layer of complexity.
“Despite an increase in diamond production, Murowa recorded a decline in revenue and profitability due to a continued decline in diamond prices,” Beebeejaun said.
“Consequently, the share of profit from the associate declined to ZWG5,6 million from ZWG12,8 million recorded in the comparative period.”
It has been a tough year for diamond producers globally, as prices continue to tumble due to a variety of reasons, chief among them, competition from lab-designed diamonds, over-supply into the market and a generally challenging global economy that has weakened purchasing power.
The world’s largest diamond producer by value, De Beers’ revenue decreased by almost US$600 million to US$2,2 billion in its half year to June 30, 2024 financial results.
This was punctuated by its parent company Anglo American announcing plans to divest and demerge from its diamond subsidiary of which it owns 85 percent.
Over the years, Murowa has invested in modernising its operations and increasing production, resulting in an increase in the volume of diamonds produced and improved efficiency in the mining process.
Its parent company, RioZim, meanwhile, recorded a 27 percent slump in gold production to 306 kilogrammes (kg) in H1 2024 against 417kg in H1 2023 due to persistent plant breakdowns and delays in pit development at major subsidiaries.
The gold miner continues to be an inefficient, high cost producer owing to years of lack of investment in upgrading of equipment and mines development.
Regrettably, the group has not been able to capitalise on this year’ soaring gold prices to turn around its fortunes.