Bindura Nickel Corporation seeks toll deals

Bindura Nickel Corporation seeks toll deals
Published: 14 December 2017
BINDURA Nickel Corporation (BNC) says it has begun scouting for third party producers to process their concentrate under toll manufacturing deals at its soon to be completed $26,5 million smelter at Trojan mine.

BNC managing director (MD), Batisai Manhando told analysts during a presentation of the firm's financial results for the half year ended September 30, 2017 last week that output at Trojan alone would not be enough to feed into the smelter.

The smelter is still 83 percent complete and its completion has been decelerated by limited funding following the full utilisation of a US$20 million bond that funded the projects, according to Manhando.

He said the project had slowed down until funding is secured and there is an increase in nickel price on the world market, although it will be completed in 2018.

So far, US$21, million had been committed to the project.

Nickel output grew 1,16 percent to 3 460 tonnes during the review period, from 3 420 tonnes the previous year, BNC said last week.

Throughput from third party players would be crucial to run the smelter viably, he said.

The Zimbabwe Stock Exchange listed BNC has said the rationale behind the smelter was the need to get higher prices of nickel in leach alloy than nickel concentrate.

This would have the potential to increase revenue by over 15 percent per tonne.

Africa's only integrated mining and smelting company had also indicated that it would embark on phase two of the Trojan Mine re-deepening programme to ensure adequate feedstock in the absence of third party supply.

Manhando told analysts that the smelter was nearing completion, but several issues had emerged, such as low commodity prices that could make the smelter unviable, as well as high power tariffs.

He said should power tariffs be reviewed downwards to about three to five cents per kilowatt hour, this would expedite the opening of the smelter.

Power tariffs are at about 12 cents per kilowatt hour.

"We are discussing with third parties for toll processing," the BNC MD said, noting that as much as 45 percent of the smelter would require external throughput.

"We are still producing and selling concentrates. We are working on the smelter to value add. The prices have not been good to finish the concentrate. Even if we finish, it will not be viable to start the smelter at current nickel prices. But there will be steady demand for nickel next year. We are in the game," said Manhando, who said the bulk of nickel mined at Trojan was being exported to Canada.

Nickel prices averaged $6 422 per tonne during the review period, from $6 198 per tonne the previous comparable period.

BNC's net income grew by 88 percent to $2,2 million during the review period, from $1,2 million during the prior comparable period last year, on improved prices and cost management initiatives.

Revenue increased by seven percent to $24,1 million during the review period, from $22,5 million the previous year.

Operating profit rose by 54,5 percent to $3,4 million, from $2,2 million during the prior comparative period the previous year.
- fingaz
Tags: BNC, Nickel,


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