Bindura smelter project put on hold

Published: 07 December 2018
PAYMENT for a bond which was floated a few years ago for the restart of a smelter by Bindura Nickel Corporation (BNC) is weighing down on the company's capital requirements after it spent US$5 million in capital repayments plus interest last year, businessdigest can report.

A company official revealed this week that the smelter was not yet contributing to the repayments, a situation that was making it even harder for the company financially. The company's FD, Jan Lampen said on the sidelines of an analyst briefing in Harare on Wednesday that it would only become viable to pursue smelting at a nickel price of at least US$16 200 per tonne.

"We are paying a bond and the smelter is not contributing anything. The bond interest capital rose to US$5 million plus interest and we had to pay. So it's money that we have to generate from somewhere. In this case, it comes from working capital. So once we are able to construct the smelter and we generate additional revenue and profits, it will become a thing of the past," Lampen said.

He said the corporation was looking at maintaining its overdraft level at US$7 million to enable it to manage its capital requirements. It has already spent US$5 million, with US$3 million excepted to be spent in the current financial year.

Lampen said they had managed to secure a US$5 million facility from CBZ Bank expected to go a long way in meeting its funding requirements.

"We have a US$7 million overdraft which we maintain all the time. We managed to secure a US$5 million capital facility and if you look at our capital we already spent US$5 million and expect to use another US$3 million before the end of the financial year. We intend to keep it at that for as long as we have the capital requirements. It's permanent unless something urgent comes up," he said.

BNC in 2016 rolled over to early last year the repayment of the principal component of its US$20 million bond issued to finance the restart of the Trojan Mine smelter due to financial challenges.

BNC had indicated earlier that the balance required to cover the total project cost of US$26,5 million — following the $20 million bond issue — would be met from internally generated funds.

According to terms and conditions of the Trojan smelter restart bond, the payment of the principal amount was subject to an 18-month moratorium from date of issuing the bond.

A total of US$3,3 million was due for payment to bond holders as at September 1 2018.
- the independent
Tags: Bindura,

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