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Enacy Mapakame Business Reporter

Bindura Nickel Corporation, a Victoria Falls Stock Exchange (VFEX) listed resources group, says late delivery of its equipment due to global supply chain disruptions has negatively impacted operations after output took a dip.

Industry-wide, businesses have bemoaned the logistical challenges caused by the Covid-19 pandemic and disruptions emanating from the conflict in Ukraine, which disrupted commodity and supply chains.

BNC said production performance was adversely affected by an unexpected change in ore body, which necessitated a rapid transition in the mining model from a low-volume, high-grade strategy to a low-grade, high-volume strategy. According to the group, the transition is behind schedule due to a delay in the delivery of new underground mining mobile equipment, which is a prerequisite to the realisation of the new mining strategy. The delay has also caused a decline in earnings.

“Unfortunately, the transition is behind schedule due to a delay in the delivery of new underground mining mobile equipment which is a prerequisite to the realization of the new mining strategy.

“The delay in the delivery of equipment was due to disruptions in the global supply chains as a result of the protracted effects of the Covid-19 pandemic and the ongoing geo-political tensions related to the Russo-Ukraine conflict,” said Bindura in a cautionary announcement.

As a result of the delays in the delivery of underground mining equipment, the resources group has experienced reduced production and a decline in project profitability for the half year to September 30, 2022.

“The board of directors of Bindura Nickel Corporation Limited (BNC or the company) wishes to inform the shareholders of the company, potential investors, and the general public, of the projected decline in the company’s profit for the half year ended 30 September 2022, amounting to approximately 193 percent when compared to the half-year ended 30 September 2021.

“Based on the preliminary assessment of the consolidated financial results, the company is expecting to record a net loss after taxation in comparison to the net profit after taxation that was originally expected for the same period in terms of the company’s profit forecasts as well as the net profit realised in the comparative period last year.

“Accordingly, shareholders and the investing public are advised to exercise caution and to consult their professional advisers when dealing in the company’s securities until another announcement is made,” said Bindura.

According to the group, the mining mobile equipment is now expected to arrive at the mine before the end of the calendar year, which will enable the mine to transition into a high-volume, low-grade mining strategy.

This will lead to an anticipated upswing in ore volumes and a return to profitability in the second half of the year under review.

Apart from the delays in the delivery of equipment, the group also experienced another setback beginning in the second half of the current financial year. In early October 2022, the company experienced a breakdown of the Subvertical Rock Winder (SVR) which hoists ore from underground for further processing at the concentrator plant. The breakdown has resulted in the temporary stoppage of ore hoisting operations and, consequently, the two products of nickel concentrates.