RioZim in trouble over job cull

MANAGEMENT at one of Zimbabwe’s oldest gems producer, Murowa Diamonds have been accused of undermining President Emmerson Mnangagwa’s US$12 billion mining vision after its plans to cull 50% of its workforce emerged, the Zimbabwe Independent can report.

In a letter to Murowa management obtained by the Zimbabwe Independent this week, Zimbabwe Diamond & Allied Minerals Workers Union (Zdamwu) officials said the union had noted with concern a jobs bloodbath at Murowa.

The mine is controlled by Zimbabwe Stock Exchange listed resources outfit, RioZim Limited, which reported significant write downs during the half year ended June 30, 2022.

Zdamwu’s letter was triggered by reports that Murowa plans to cut its staff complement to 400, from 800. While the letter is dated February 21, Zdamwu secretary-general Justice Chinhema told the Zimbabwe Independent on Wednesday this week that job cuts at RioZim’s diamond operations would affect mineral output.

The mining vision is one of several signature policies driving efforts to rebuild Zimbabwe’s struggling economy.

Under the US$12 billion strategy various minerals are expected to improve output this year, with diamonds expected to contributing US$1 billion.

“We have given them three days to get back to us and if they don’t we are taking the matter to NEC. As it is, we have 49 of our members whose contracts were only ending in 2024 that have been retrenched for the reason that they are re-structuring,” Chinhema said.

The retrenchments at Murowa were being driven by ‘mismanagement,’ he added.

“Rumours are also circulating that you intend to lay off 400 workers out of the total 800 workers currently employed,” the letter reads.

“It has further come to our attention that some departments have notified their workers of a voluntary retrenchment exercise. If all this we are hearing is true, then it is confirming what we have been saying in all our letters that RioZim is lacking strategic direction and proper management.

“Your workers and the union now share the view that the correct situation facing RZM (RioZim Murowa) together with other RioZim companies is lack of proper management. To be honest with you, we have lost confidence in the shareholders of the company and its management. Workers are working in fear of losing their jobs and all is pointing (to) sabotaging the government’s target of US$12 billion mining economy by 2023.”

“(The) mining industry, as the backbone of the country’s economy, as clearly positioned by the Government of Zimbabwe through National Development Strategy 1 & 2, requires every one including your management to play your part through creating and securing more jobs. The timing of your activities now worries us and we are afraid might degenerate into labour unrest,” the labour leader noted.

RioZim has been going through a difficult patch in the past year. Financial results for the half year ended June 30, 2022 showed that liabilities at the firm barrelled over current assets by $13 billion, about US$14 million today.

Firms sitting on higher current liabilities than current assets sweat over working capital — the liquidity that managers require to fund day to day activities.

RioZim chairman Saleem Rashid BeebeeJaun at the time said the firm had moved to shut down one gold mine that has been bleeding for ages and suspended operations at another, as it reported plummeting output across its gold and diamond assets.