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Company sources told Herald Business yesterday that Mwana Africa, with a 53 percent controlling stake in BNC, had agreed to immediately release a convertible of US$10 million to the nickel producer.
Currently, BNC is under care and maintenance. The ZSE-listed firm requires about US$50 million for recapitalisation.
“BNC wants to raise US$50 million for recapitalisation, but the parent company will immediately lend them US$10 million as restart capital while pursuing other capital raising initiatives,” said one source.
The only integrated nickel mine, smelter and refinery complex in Southern Africa, BNC has the potential to become a processing centre for materials produced throughout the region.
Last year, the company said it was targeting an annual output of 7 000 tonnes per year.
The firm recently signed an offtake agreement with Glencore International, a leading global trader in commodities, under which Glencore will buy all nickel concentrate produced at BNC’s Trojan Mine until its smelter and refinery were back on stream.
Under the deal, Glencore would pay the nickel mining firm an LME-linked price based on agreed terms of the final contained nickel.
Mwana Africa chairman Mr Kalaa Mpinga said the agreement with Glencore was critical for the revival of BNC. Zimbabwe’s nickel output is expected to reach 15 000 tonnes in the next five years, double the current production levels.
According to the Medium Term Plan, nickel production will largely be driven by resumption of operations at BNC and recapitalisation of RioZim’s Empress Nickel Mine.
BNC is one of several Zimbabwe mining entities that suspended operations in 2008, as economic conditions became unbearable.
Peter Tanyanyiwa
Online Reporter