BNC upbeat about growth this year
Bindura Nickel Corporation (BNC) says demand for nickel from the battery industry may not be as strong as anticipated because major car makers like VW and Tesla have opted to use Lithium Iron Phosphate (LFP) batteries.
In a trading update for the third quarter and nine months ended December 31, 2021, BCN said the car producers now preferred the LPF batteries, instead of batteries that contain nickel for their entry level Electric Vehicle (EV) models.
“In spite of potentially bearish factors, nickel price is however, forecast to remain above US$20 000 per tonne for the remainder of the year and will be the main driver of the company’s performance for the year to March 2022,” the company said.
Zimbabwe is believed to hold some of the biggest reserves of lithium in the world, positioning the country well to benefit from rising demand by car makers.
According to BNC, the rising geopolitical tensions in Ukraine and Taiwan, the nickel production ramp ups in Indonesia, lifting of the four-year Covid-19 variants are bearish factors that could dampen sentiment and depress the nickel price.
In its outlook for the quarter to March 31, 2021, the London Metal Exchange (LME) average nickel prices are expected to remain strong during the last quarter of 2022, with the prices having hit an 11-year-high of US$24 000 per tonne in January 2022.
“Demand is expected to be strong due to the accelerated vehicle electrification agenda, the transition to cleaner forms of energy, the Chinese property sector recovery and increased government infrastructure spending,” the company said.
It added that stainless steel production is expected to remain the major consumer of nickel. In terms of operations, BNC expects to meet its production plans for the year ending March 31, 2022.
“In addition, the Company is seeking to exploit the opportunities presented by the continued firming of nickel prices on the global markets, as a result of increasing demand for the metal, and the existence of huge untapped resources, albeit lower in grade, to increase production volumes in the next five years,” said BNC.
The company also expects to proceed with its business development projects that include the Trojan Mine — down dip exploration and extension project that is aimed at exploring the feasibility of extending the massive ore body from 49 level to 57 level in order to increase the life of mine beyond 10 years.
BNC also noted that exploration works had started at Kingston Hill, which are aimed at evaluating a potential ore resource.
Meanwhile, for the third quarter to December 31, 2021, ore mined decreased 14 percent to 100,643t compared to 116,525t for the same period in the previous year, due to below budget underground mobile mining equipment availability.
For the nine-month period to December 31, 2021, tonnes mined grew five percent to 341,443 tonnes compared to the same period last year following the company’s transition to a new low-grade and high volume strategy from the high–grade and low volume mining strategy.
“Tones ore milled increased by four percent to 339,543t in line with the increase in the tonnes ore mined,” the company said.
Head grade declined to 1,35 percent from 1,56 percent achieved in the corresponding period last year in line with the company’s mining strategy.
As a result, nickel in concentrate produced was 11 percent lower at 3,933 tonnes compared to the same period last year due to delayed commissioning of the Re-deep and Tie-in Project in April 2021, the challenges encountered compared to the development of massive ore sources in September and October 2021.
“Other challenges include poor underground equipment availability from the aged mobile underground mining mobile equipment,” said BNC.
BNC said although sales volume were lower, revenue for the nine months grew by 16 percent compared to the same period in the previous year, reflecting the impact of the increase in nickel prices.-The Herald
