|BNC gets duty-free import rights|
|Friday, 20 July 2012 00:00|
THE Government has accorded Bindura Nickel Corporation, National Project Status, which allows duty free importation of equipment. Finance Minister Tendai Biti said Government took a deliberate approach to facilitate the resumption of operations at closed and distressed mining companies to ensure the country benefits from its natural resources.
The intervention is expected to see BNC resuming operations before the end of the year.
“Similar and other appropriate approaches will be considered in respect of other closed and distressed mining companies,” Minister Biti said.
He added that the country stood to benefit in terms of employment, income and fiscal revenues.
Mining contributes 11 percent to the Gross Domestic Product and is the biggest contributor to exports.
The country’s mining sector requires an estimated US$9 billion to recapitalise and operate at optimum levels.
Mashava and Zvishavane Asbestos Mines, Kamativi Tin Mine, Buchwa Mine, Zimbabwe Alloys and about seven gold mines under care and maintenance will benefit from Government’s fiscal intervention.
Minister Biti said resuscitation of such mines requires huge investment and complementary support from Government. Analysts yesterday said the incentives would give impetus to BNC, whose shareholders approved a US$21 million rights issue to finance the restart of Trojan Nickel Mine.
The company directors will also issue shares to creditors and staff to settle some of its liabilities. Mwana Africa, owner of 52,9 percent of BNC’s total issued share capital, is underwriting the rights issue.
Although shareholders have given the green light, for the rights issue, its implementation would depend on BNC reaching consensus with staff on the settlement of retrenchment and back-pay costs. Additionally, there would have to be a settlement of about US$16 million owed to creditors.
While the focus is on Trojan to restart, the group’s other assets, including Shangani Mine, Hunter’s Road and a smelter and refinery present future upside potential.
Furthermore, drilling at Trojan Mine continues to indicate that the ore body is open at depth, suggesting that Trojan’s Mine life could be extended.
Following improving economic and operating conditions in Zimbabwe, BNC’s directors have considered a number of potential restart scenarios.
They have decided on a phased restart, beginning with Trojan, which will initially produce concentrate. In February last year, BNC entered into an off-take agreement with Glencore, where the latter would buy the concentrate produced at Trojan.
BNC is listed on the Zimbabwe Stock Exchange and owns the only integrated nickel mine, smelter and refinery operation in Africa.