THE Zimbabwe Stock Exchange-listed resources outfit RioZim is in danger of collapsing if action is not taken quickly, a trade union warned yesterday, asking the government to step in and preserve jobs.
The Zimbabwe Diamond Mineral and Allied Workers Union (Zdamwu) wrote to Mines and Mining Development minister Winston Chitando stating that RioZim was experiencing financial difficulties.
“As we write to you Hon minister, RioZim group of companies is on the verge of collapsing if action is not taken soon,” Zdamwu general-secretary Justice Chinhema said in a letter dated February 22, 2023.
“Dalny Mine in Chakari has closed and close to 400 workers lost their jobs, Empress Nickel Refinery in Eiffel Flats has closed and close to 100 workers lost their jobs, fixed-term contract workers at Cam & Motor and Renco Mine have all been terminated. Today, we hear they want to lay off up to 400 workers at Murowa Diamonds.
“All this is happening in a very short space of time. The situation in the RioZim group points to lack of strategic direction. Workers and other stakeholders share the view that the situation prevailing in this group of companies is due to financial distress, gross undercapitalisation and lack of proper management,” he said.
The union has threatened to apply to have RioZim placed under corporate rescue.
Some of the laid-off employees barricaded RioZim offices in Newlands, Harare, on Tuesday, demanding payment of their severance packages.
The workers said they would sleep at the offices until their demands were met, according to Chinhema.
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RioZim controls some of the country’s best known and oldest mines, including Cam & Motor Mine, Renco Mine, Empress Nickel Refinery, Murowa Diamonds and Dalny Mine.
“There is great variance on workers welfare and the extravagance on the part of the shareholders. To be honest, Hon minister, we have lost confidence in the shareholders of the company and its management,” the letter read.
“Workers have been living in abject poverty and facing hardships under the watch of the current management who have failed to find lasting solutions to all problems that affect parties to an employment contract.”
Chinhema indicated that RioZim’s management and shareholders were mandated by law to ensure that they secure existing jobs, create new ones, and ensure that workers enjoy lives commensurate with the amount of work they do.
“The conditions that this company is subjecting its employees to are not expected from such an organisation. Our members have reached a stage where they are seeking your intervention as soon as possible,” he said.
“It has become very clear to the workers and other stakeholders’ including the union that the organisation is in financial distress. Workers for two years were made to understand that the Biox plant in Kadoma, Cam & Motor Mine was going to be a game-changer for everyone earning salaries in bits and pieces.
“Today after the commissioning of the Biox plant, things are moving fast towards the worst situation for most workers and their families. In our view, Hon minister, we should not wait until another mine collapses, and jobs lost, but diligence requires that we act now.”
Current liabilities at RioZim barrelled over current assets by $13 billion during the half-year to June 30, 2022, as terrified authorities feared the firm could collapse.
Firms sitting on higher current liabilities than assets sweat over working capital — the liquidity that managers require to fund day-to-day operations.
RioZim chief executive Manit Mukesh Shah was not reachable for comment.