Enacy Mapakame : Business Reporter

Bindura Nickel Corporation Limited profit after tax for the year ended March 31, 2016 slumped 94 percent to $0,65 million on lower production and subdued global commodity prices . Production for the year was 9 percent lower following a planned major shutdown in July last year to allow for an upgrade of power supply systems and introduction of a new mining model in the second half of 2015.The new mining model resulted in the reduction of overall output, although this resulted in increased proportion of high grade ore.

Gross profit for the period under review fell 75 percent $9,1 million while operating profit was 778 percent weaker to $1,8 million compared to $15,8 million in the prior year on the back of reduction in nickel prices.

Milled ore reduced 26 percent to 440 449 tonnes from 598 766 tonnes milled in the prior year on the company’s new mining model.

Head grade was 1,71 percent compared to 1,46 percent in the same period last year.

Recovery was 86,5 percent, better than last year’s 83,7 percent due to higher ore grade received.

Group managing director Mr Batirai Manhando said sales of nickel in concentrate for the year were 10 percent lower to 6 613 tonnes compared to 7 352 tonnes in line with reduction in overall output.

Resultantly, turnover from tonnage sales fell 46 percent to $42,3 million from prior year’s $78,9 million.

The company earned $6 737 for a tonne of nickel in the interim, 37 percent lower than $10 855 from a year ago on firming US dollar, the contracting Chinese economy and the fall in crude oil prices.

China accounts for 30 percent of Zimbabwe’s total exports – mainly nickel, chrome, ferrochrome, platinum and tobacco – and consumes 50 percent of all the world’s minerals.

From gold to platinum, copper to coal, world metal prices have see-sawed between 10 and 45 percent in the past year.

The World Bank said in its Commodities Market Outlook report it expected metal prices to be depressed, due to the slowdown in China. Nickel accounts for over 65 percent of the raw material in global stainless steel manufacturing.

Management at BNC is however hopeful of recovery next year, due to multiple cost cutting measures and the anticipated improvements in prices of nickel.

Already, the mining concern has laid off 300 employees in line with business restructuring as well as cutting on salaries for all employees.

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