Golden Sibanda Senior Business Reporter
BINDURA Nickel Corporation has spent over $7 million on capital equipment over the last 12 months as part of an investment exercise aimed at boosting production and efficiencies. The investment on rebuilding mobile equipment and acquiring new ones such as dump trucks, rigs and LHDs, is seen helping BNC reverse the production blip in the last quarter of 2014.
The nickel and coal extractor suffered a 30 percent decline in nickel in concentrate production to 1 383 tonnes in the quarter to December after taking out equipment for rebuilding.
Refurbishments had not been completed by close of the quarter due to lower than anticipated dump truck availability for both massive transportation and waste movement.
BNC said challenges with equipment resulted in extraction limitations, but this will be reversed to optimal levels in February and March when new and rebuilt equipment is brought in.
“We have spent about six to seven million dollars on capital,” managing director Mr Batirai Manhando said, adding retooling and refurbishment of equipment was an ongoing exercise.
Mr Manhando said he was confident about the future saying the company was almost done with refurbishments and would now concentrate on ramping up production.
The Zimbabwe Stock Exchange-listed firm said forecast annual nickel sales for 2015 are expected to end in line with prior year during which a total of 7 129 tonnes of nickel was sold.
The group’s turnover generated from the sale of the 7 129 tonnes of nickel at a value of US$65 million, also included the sale of by-products, namely copper and cobalt. The company reported an operating profit for the year of US$17,3 million in the period.
This represents huge strides of progress since completion of a 23 million capital raise in September 2012, en- abling resumption of production after years under care and maintenance.
“We are now fully covered in terms of equipment, the ore body is still open ended . . . so the ore body is there, we are left with is to extract; what we need to extract is essential pieces of equipment, which we have now essentially purchased,” he said.
The BNC boss was confident the group was on a firm footing with prices seen on the upside at a time of the major producers of nickel, Indonesia, has banned exports of raw nickel.
Mr Manhando said earlier that it would take producers in the Asian country a minimum of five years to build beneficiation facilities and resume the exportation of nickel.
If the ban remains in effect, it is expected to raise nickel pig iron production costs, reduce NPI production in China, and result in increased demand for primary nickel and ferro-nickel.
In January 2015, Trojan Mine milled 39 904 tonnes of ore to produce 427 tonnes of nickel concentrate. Recoveries and grade showed improvement in January of 8,1 percent.
BNC also secured a short-term overdraft facility of $7 million with a local financial institution to fund bridging finance for long lead orders for its smelter and working capital.
This will complement the $20 million the company is raising through a bond, with commitments at $15 million, to reduce transport cost, improve pay ability and penalties for impurities and also comply with the Government beneficiation policy thrust.