Falling metal prices hit Mwana Africa

HARARE – Zimbabwe Stock Exchange-listed Bindura Nickel Corporation (BNC)’s parent Mwana Africa plc (Mwana) says it has been compelled to, implement cost-cutting measures and revise its mining plans due to falling international commodity prices.

This comes as some mining companies in Zimbabwe, including Toronto Stock Exchange-listed gold producer New Dawn Mining Corporation, have put expansion projects on hold, owing to ?depressed commodity prices and lack of long-term financing.

“…due to a sustained decline in… the prices of gold and nickel, we have embarked on a significant cost-cutting exercise at corporate and project levels ,” said Mwana chief executive Kalaa Mpinga in his report for the quarter ended June 2013.

“In response to lower nickel prices we are also reviewing a revised mine plan at Trojan which considers focusing mining efforts on the higher grade massives,” he said, adding the period under ?review had “brought mixed fortunes for the mining conglomerate.”

Nickel prices are bearing the brunt of a steep decline in the metals markets this year with futures falling as low as $13,205 a metric ton last Tuesday on the London Metal Exchange, its lowest price since May 2009.

Prices have dropped 22 percent since the start of the year.

On the other hand, gold slid to a low of $1 192 per ounce on June 28, a level not seen since mid-2010, and despite a recent rebound taking the metal to a range of  $1 200 per ounce to $1 300 per ounce in July, prices are still well below the high of $1 889 per ounce in 2011.

BNC recently restarted operations at its Mashonaland Central-based nickel miner Trojan — which had been mothballed in 2008 due to, then, prevailing nickel market conditions and hyperinflation concerns in Zimbabwe.

During the period under review, Mpinga said, an exceptional amount of effort was also made into Trojan’s full restart while “much progress has been made culminating in sale of first concentrate in April”.

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