Vusumuzi Dube
Judith Phiri, Business Reporter
Bindura Nickel Corporation (BNC) recorded a significant decline in financial performance and incurred a loss due to lack of production following a shutdown.
The company was forced to shutdown following the deterioration of the Sub-Vertical Rock (SVR) Winder bull gear, after the previously reported initial damage that occurred in September 2022. The SVR is one of the company’s major pieces of fixed mining equipment and is used to hoist ore from underground. In a trading update for the nine months and third quarter ended 31 December 2023, the company’s finance director, Mr Believe Dirorimwe said: “The deteriorating SVR bull gear subsequently resulted in the hoisting capacity of the SVR declining to just 25 percent of its installed capacity by September 2023. To address the limited and deteriorating hoisting capacity problem, the company procured a replacement SVR bull gear, similar in size and duty, and initiated the SVR Bull Gear Replacement Project, necessitating a transient shutdown from 22 September 2023.”
He said the project was initially scheduled for completion by 31 October 2023, however, it faced unforeseen technical challenges that extended its completion date to the end of February 2024. Mr Dirorimwe said as a result of the shutdown, no ore was mined or milled, and no nickel in concentrates were produced during the third quarter of Financial Year 2024.
“In the comparable period, the company mined 51 770 tonnes of ore, milled 50 907 tonnes of ore and produced 275 tonnes of nickel in concentrate. The company did not incur unit costs during the period at the back of the temporary shutdown necessitated by the project,” he said.
However, he said the company recorded C1 costs of US$45 262 per tonne, C2 costs of US$50 366 per tonne, and C3 costs of US$52 348 per tonne in the comparative period last year. Mr Dirorimwe said the average London Metal Exchange (LME) nickel price, for the quarter, of US$17 211 per tonne was 32 percent lower than the price of US$25 349 per tonne which was realised in the same period last year.
“The price decline was attributable to a surge in global nickel supply and weak demand. No nickel in concentrates sales were recorded during the period owing to the shutdown. Nickel in concentrates sales for the same period last year was 207 tonnes. The lack of production resulted in a significant decline in financial performance and the company incurred a loss for the quarter,” he said.
He said for the performance for the nine months ended 31 December 2023, tonnes ore mined at 177 179, decreased by 37 percent in comparison to 281 560 tonnes achieved for the same period last year. In the outlook for the quarter ending 31 March 2024, Mr Dirorimwe said despite facing operational challenges, particularly the prevailing low nickel price, Trojan Nickel Mine sits on approximately 13.13 million tonnes of nickel ore at an average grade of 0.97 percent.
“This substantial resource gives a life of mine of at least 10 years at maximum design production capacity. In the last quarter of FY2024, the company will focus on commissioning the SVR after bull gear replacement and instituting stringent budgetary controls and cost containment measures in response to the challenging operating environment.”
He said to achieve long-term sustainability, the business recognises the need to implement strategic initiatives focused on full recovery and operational efficiency.
Mr Dirorimwe said the company recognises the need to acquire the required investment capital and for a sustainable electrical power tariff, considering the overall low resource grade and the prevailing depressed nickel prices on global markets.
Online Reporter