New equipment rekindles BNC’s performance
BINDURA Nickel Corporation (BNC) says replacement of the Sub Vertical Rock (SVR) winder bull gear will shore up the miner’s performance going into 2024.
BNC is now anticipating that the run on mine ore will improve due to the resuscitation of the SVR, whose breakdown significantly reduced the hoisting capacity since 2022. Overall, the decline resulted in a 70 percent decline in hoisting capacity.
As such, this lowered the tonnage of mined ore by 23 percent to 177 179 in the half year to September 2023, a notable decline from 229 790 tonnes realised in the comparable period last year.
Consequently, this had a ripple effect, causing a slump in milled ore to 163 674 tonnes, a 29 percent decline from 230 248 tonnes milled in the same period last year.
In the statement of the financials for the half year to September 30, 2023 BNC chairman Muchadeyi Masunda said the mining group expects a tremendous improvement due to the resuscitation of the SVR.
“To address the limited hoisting capacity problem caused by the damaged SVR bull gear, the Company procured a replacement bull gear, similar in size and duty to the existing one, and initiated the Bull Gear Replacement Project.
“The project is scheduled to be commissioned during the third week of December 2023,” said Dr Masunda.
Consequently, in the period under review, Nickel in concentrate production was 31 percent lower at 1,314 tonnes in the half year from 1,918 tonnes.
The decrease was attributed to the lower ore mined and milled, resultantly nickel sales volume was 1,416 tonnes, 34 percent lower than the previous year’s sales of 2,146 tonnes.
According to BNC the decline in hoisting capacity also constrained development work planned for the first half of the 2024 financial year.
Operationally, the mine’s revenue took a 43 percent dip to US$18,5 million from US$32,5 million reported in the same period last year on account of low Nickel sales volume and low Nickel prices.
The constrained operating environment saw the mining firm record a total comprehensive loss of US$6,7 million for the period a 25 percent slide from a total comprehensive loss of US$5,4 million realised in the same period last year.
Economist, Mr Doubt Chiorora said power outages disrupt mining operations seriously thus discouraging exploration and development. He said it was unfortunate that the geo-political environment had instigated a nickel price decline leading to reduced profitability.
“Power outages can disrupt mining operations, leading to unplanned downtime and reduced productivity. Without a stable power supply, mining equipment cannot operate at its full capacity, resulting in lower production levels.
“On the other hand, when prices are low, mining companies may reduce production to balance supply and demand dynamics. Therefore, low prices can create market volatility that affects both miners and consumers,” he said.
According to Dr Masunda, “The loss is reflective of the low revenue recorded during the period.”
Worryingly, BNC expects the operating environment to remain difficult for the remainder of the 2024 financial year, due to the protracted effects of the macro-economic environment and challenges experienced in the first half of the financial year.
BNC mine directors resolved not to declare a dividend in response to the losses and the need to retain cash for operations.-herald
