A court application by a mineworkers’ union is pulling back the curtain on the scale of the crisis at RioZim, the once-prominent gold producer now under the weight of debt and failing mines.
The Zimbabwe Diamond and Allied Minerals Workers Union (ZIDAMWU) is in court seeking to place RioZim under corporate rescue, saying this is necessary to save the company. According to court papers, the company owes its workers US$5.6 million in unpaid salaries. Power at its main mine, Renco, has been disconnected over a US$4.7 million electricity debt, while ZIMRA is demanding a list of assets over a US$5.5 million tax bill.
RioZim, controlled by GEM Investments, was thrown further into turmoil following the death of majority shareholder Harpal Randhawa in a plane crash in 2023. Since then, the crisis at the company has worsened, the workers say.
“The situation worsened due to insufficient shareholder support and a lack of additional capital injection,” ZIDAMWU’s General Secretary Justice Chinhema says in the papers.
Recently, RioZim announced plans to sell to new shareholders, but the union wants the company stabilised first under corporate rescue. The union estimates the company needs at least US$200 million to pay off creditors and finance a turnaround.
“We need a clear roadmap. This should include a full audit of company assets and finances, in line with Section 142 of the Insolvency Act,” Chinhema said.
ZIMRA has demanded a full register of RioZim’s movable assets and asked for details of executive vehicles. According to the union, “ZIMRA’s unprecedented request signals concerns of serious fraud and financial impropriety”.
Workers want investigations into some asset sales. The workers allege that RioZim sold its One-Step (also known as Cricket) Mine for US$6 million, but only reported US$1 million in proceeds. The union claims the transaction lacked regulatory approval and may have deprived government of capital gains tax.
Workers want an audit of management actions, including “the alleged taking of gold carbon outside the mine for processing” and questionable spending on maintenance, such as boiler repairs. – (NewZWire)
