10 February 2013

Zimbabwe: Riozim Seeks U.S.$300 Million for Expansion Activities

RIOZIM says foreign funders for its US$300 million expansion programme want the diversified resources firm to get indigenisation certification before they can avail the funds, court documents show.

RioZim requires funding to increase production at Renco Mine, refurbishment and expansion at Empress Nickel Refinery and re-opening of the Sengwa Colliery.

It also wants to re-open Cam and Motor Gold Mine in Kadoma and to retreat the Cam and Motor and the Renco tailing dumps.

According to an opposing affidavit filed by Tourism and Hospitality Industry minister Walter Mzembi in his dispute with RioZim, the group sought his assistance to obtain certification.

RioZim and Mzembi are locked in a court battle after the resources group accused the minister alongside his advisors Obediah Mazombwe and Chivi South MP Irvine Dzingirai of allegedly causing disturbances at Renco Mine, a RioZim subsidiary.

High Court judge Justice Hlekani Mwayera on Wednesday reserved judgement in the matter.

RioZim board chairman Elisha Mushayakarara and managing director Ashton Ndlovu pleaded with Mzembi to assist in expediting the indigenisation certification, key to mobilising funding for the expansion programmes, according to correspondence attached to the affidavit.

The diversified resources group is expected to submit its revised plan to the National Indigenisation and Economic Empowerment Board in the next two weeks.

In a November 5 2012 letter to Mzembi, Mushayakarara said the company needed funding for expansion.

The letter followed a meeting Mushayakarara and Ndlovu had with Mzembi four days earlier.

"The above projects need an excess of US$300 million which we believe RioZim can attract as soon as we are certified as a Qualifying Indigenous entity," Mushayakarara wrote.

"The impact of this would not only be to guarantee continued employment of our current +/-2 000 staff and also support of their +/-20 000 dependents but to potentially create a similar number of new jobs in Masvingo South, Kadoma and Sengwa."

The expansion at Renco would increase production to 140kg per month from the current 65kg. Refurbishments at Empress Nickel Refinery was envisaged to increase refining capacity to 45 000 tonnes per year from 15 000 tonnes.

The re-opening of Sengwa would result in the construction of a 150 to 300 MW coal-fired power station.

RioZim plans to reopen Cam and Motor Gold Mine with a projected gold production of 150 kg per month.

"Honourable minister Mzembi, your assistance in helping us urgently secure this certification is hereby requested," Mushayakarara wrote.

Ndlovu wrote in a November 5 2012 letter pledging RioZim's support to work with Mzembi in identifying and implementing corporate social responsibility projects in the minister's constituency, Masvingo South.

Ndlovu said RioZim was also keen to champion the establishment of Information Communication Technology centres to help young students to get acquainted with computer technology at an early stage. He said RioZim was committed to becoming a "model of a responsible corporate citizen in your constituency and this can only be possible if we have maximum support possible from the local leadership in facilitating a conducive business environment".

A key issue that will enable RioZim to grow, Ndlovu said, was the ability to attract foreign investment to fund projects.

"Critical to achieving this is the conclusion of RioZim's certification as an indigenous company and I hereby appeal to you for any assistance you may render in expediting the process," Ndlovu wrote.

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