BNC adopts new mine plan as nickel prices slump

HARARE - AIM-listed Mwana Africa plc says it has successfully revised its mining plan at Zimbabwe-based Bindura Nickel Corporation (BNC) following the continued fall in international nickel prices.

The resources group said Zimbabwe Stock Exchange-listed BNC has completed internal review of the new mining strategy at its subsidiary Trojan Mine (Trojan).

“The Trojan mine plan has been revised to target the higher grade zones of the ore body, known as “massives”, following the recent fall in the nickel price,” Mwana explained.

“The occurrence of the massives enables higher grade ore to be mined,” the group said, adding that the new plan is expected to reduce the cost per tonne of nickel produced.

The new plan projects the mining of average nickel grade of 1,18 percent over the next three years, including ore from the massive sulphides, compared to a grade of 0,89 percent in the original mine plan.

Total planned production of 10 200t of nickel over the three-year period is 35 percent  higher than that estimated in the previous mine plan.

Mwana said BNC management is already implementing the new mine plan at Trojan and “is confident that the new plan will significantly improve BNC’s cash flow and reduce its working capital requirements.”

“BNC has sold over 1 000 tonnes of nickel since the first concentrate was sold in April 2013 following the restart at Trojan,” the miner said, adding that the Zimbabwean unit was in the process of seeking debt finance from local banks for the reduced working capital requirement.

This comes as BNC continued to trade in the red, incurring a $12,9 million loss in the year to March 31, 2013.

The nickel producer recorded a $12,7 million loss in the previous comparable period.

Conrad Mukanganga, BNC company secretary attributed the loss to low turnover and care and maintenance costs.

“The results for the year under review are in line with what would be expected from a business on care and maintenance and one which is starting up operations,” he said.

“…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.

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 tonne last Tuesday on the London Metal Exchange, its lowest price since May 2009.

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

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.