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Oliver Kazunga , Senior Business Reporter
BINDURA Nickel Mine’s future is bright on the back of operating costs the company has managed to keep under control as well as the anticipated improvement of the price of nickel on the international market.
Bindura Nickel Mine (BNC) is owned by Asa Resource Group formerly Mwana Africa.
In a quarterly update for the period ended June 30, 2016, Asa chairman Mr Yat Hoi Ning said despite having remained close to a five-year low at about $8 800 per tonne, the nickel price has since last month outperformed most base metals trading at $10, 000 a tonne.
“Operating costs are well under control and with the smelter coming on stream at a time when the nickel price is normalising, it’s reasonable to expect BNC’s future to be much brighter than in the recent past,” he said.
“It has been well reported that both the Philippines and China have major environmental concerns over nickel production.
“This could accelerate the supply deficit and place upward pressure on the nickel price —should this happen, this would open further opportunities for the group,” he added.
Trojan Nickel Mine, which is owned by BNC, though all its sustaining costs increased to $6,489 in the first quarter, BNC’s stated medium-term target remains in the range of $5,000/t to —$6,000/t over the medium-term.
“If, as many expect, the nickel price stays above $10,000/t, investors can clearly calculate the price dynamics shifting in Trojan’s favour.
Additionally, Mr Ning said once the smelter is in full production next year, BNC’s percentage of the market price was bound to increase remarkably.
“Management believes BNC has weathered the worst of the storm. Against a very low nickel price, BNC’s Trojan mine achieved an exceptional result in its previous quarter when both all sustaining costs and nickel sales performed much better than their long-term historical average. Any comparison therefore between the last quarter (Q4 FY2016) and this quarter (Q1 FY2017) is going to appear disappointing,” he said.— @okazunga.
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