Mwana Africa shifts focus to diamonds

Oliver Kazunga Senior Business Reporter
MWANA Africa says it will restart underground mining at its South Africa’s diamond mine following the stagnation of gold production at its Zimbabwean operations during the financial year ending March 31, 2015. The multi-commodity resource firm, whose principal operations and exploration activities involve gold, nickel, copper and diamonds, also has operations in the Democratic Republic of Congo and Angola.

Locally, the multi-commodity resource firm owns Freda Rebecca Gold Mine and Bindura Nickel Mine in Mashonaland Central province.

Mwana Africa said in a statement although the recovery of diamonds at the Klipspringer Diamond residue treatment joint venture in South Africa reached planned capacity, this was less than anticipated.

“Consideration is now being given to the reprocessing of coarser tailings and to an eventual reopening of underground operations on the mine’s Leopard fissure,” it said.

It said its overall profit for the year ended March 31, 2015 fell from $50 million to $7 million, underlining a difficult year with low gold and nickel prices.

“The past year has proved to be particularly challenging for the Mwana group as a whole as the prices of our two principal products, gold and nickel, weakened and have continued to fall since the financial year-end. Consolidated profits deteriorated sharply with a number of operational set-backs that contributed to higher unit costs. The group’s net profit fell to $7.0 million from the preceding year’s $50.6 million, although there was a $28 million impairment reversal in the prior year, which contributed to higher profits.”

At the Freda Rebecca Gold Mine, production stagnated as a result of equipment failures that needed to be addressed and improvements that were effected on an ad hoc basis.

These technical problems were paralleled at Bindura Nickel’s Trojan mine where a large part of the mine’s equipment had been allowed to deteriorate during the period of care and maintenance, and needed to be progressively refurbished and replaced throughout the year. Mwana said the planned re-start of Bindura Nickel’s smelter was initiated during the past year at a budgeted cost of $22 million, with internal financing augmented by the issue of a $20 million five-year bond.

“The smelter will have the capacity to process Trojan’s own concentrates and to toll-treat outsiders’ concentrates to produce nickel leach alloy. The bond will be serviced from revenues enhanced by the smelter’s operations”.

At the end of the financial year under review, Mwana Africa’s shareholders voted on certain changes to the board of directors.

Four new independent directors have been appointed to the board, with a mandate to lead Mwana to the next stage of its development.

“The changed directorate has opened the way for greater financial and technical involvement by Chinese investors, a development that bodes well for the future,” said the group.