Bindura Nickel Corporation incurs losses due to lack of production
LISTED major nickel mining concern, Bindura Nickel Corporation (BNC) says despite facing operational challenges, particularly the prevailing low nickel price, Trojan Nickel Mine sits on approximately 13,13 million tonnes of nickel ore at an average grade of 0,97 percent.
This substantial resource gives a life of mine of at least 10 years at maximum design production capacity.
In a trading update for the nine months and third quarter ended 31 December 2023, BNC finance director, Mr Believe Dirorimwe said in the period under review, globally, nickel prices on the London Metal Exchange experienced a significant decrease of 48 percent dropping from US$31,200 per tonne at the beginning of January to US$16,300 per tonne at the end of December 2023.
The slump in nickel prices can be attributed to market surplus conditions, which have arisen due to a surge in production from both China and Indonesia coinciding with subdued global demand.
China has been producing high-purity class 1 Nickel, which is used in the production of nickel sulphate and nickel cathodes for Electric Vehicles (“EVs”).
On the other hand, Indonesia has been producing lower purity class 2 Nickel (nickel pig iron and ferronickel), which is used in products such as steel.
He added that the nickel surplus for 2023 was estimated to be 200,000 tonnes (in an estimated 3,2 million tonnes market) while that of 2024 is expected to be 140,000 tonnes.
With the global outlook that has a bearing on the local front, Mr Dirorimwe noted that operations were affected by the deterioration of the SubVertical Rock Winder (“SVR”) bull gear, after the previously reported initial damage that occurred in September 2022.
The SVR is one of the company’s major pieces of fixed mining equipment and is used to hoist ore from underground.
The deteriorating SVR bull gear subsequently resulted in the hoisting capacity of the SVR declining to just 25 percent of its installed capacity by September 2023.
“To address the limited and deteriorating hoisting capacity problem, the Company procured a replacement SVR bull gear, similar in size and duty, and initiated the SVR Bull Gear Replacement Project (necessitating a transient shutdown from 22 September 2023.
“The project was initially scheduled for completion by 31 October 2023.
“However, the project faced unforeseen technical challenges that extended its completion date to end of February 2024.”
Mr Dirorimwe said as a result of the shutdown, no ore was mined or milled, and no nickel in concentrates were produced during the third quarter of Financial Year 2024.
In the comparable period, the firm mined 51,770 tonnes of ore, milled 50,907 tonnes of ore, and produced 275 tonnes of Nickel in concentrate.
In the period under review, no nickel in concentrates sales were recorded owing to the shutdown.
Nickel in concentrates sales for the same period last year was 207 tonnes.
The lack of production resulted in a significant decline in financial performance and the firm incurred a loss for the quarter.
Based on the report, tonnes ore mined, at 177,179, decreased by 37 percent in comparison to 281,560 tonnes achieved for the same period last year.
Run-of-mine ore was low due to the deterioration of the SVR bull gear.
“In line with the decrease in the tonnes of ore mined, the tonnes ore milled, at 163,674, decreased by 42 percent from 281,135 tonnes recorded in a similar period last year. Head grade, at 1,10 percent, declined by 19 percent from the 1,35 percent attained in the comparable period last year due to the down dip reduction in the footprint of the high-grade resource.”
Nickel in concentrates produced, at 1,314 tonnes, was 40 percent lower than 2,192 tonnes recorded for the same period last year due to lower milled tonnage and grade of mined ore.
Nickel in concentrates sales for the period, at 1,416 tonnes, were 40 percent lower than 2,353 tonnes sold during the same period last year.
The sales decreased in line with the decline in production.-chronicle
