BNC loss widens
BUSINESS REPORTER
Listed miner, Bindura Nickel Corporation (BNC) suffered a wider loss of US$6.7m in the six months to September 30, 2023 compared to US$5.4m incurred in prior comparative period, Business Times can report.
Muchadeyi Masunda, the chairman of the BNC board, blamed a number of operational challenges, including soaring power costs, for this loss.
“Economic activity in Zimbabwe was constrained during the period, hampered by macroeconomic conditions such as exchange rate instability, coupled with global headwinds emanating from the cumulative effect of tightened monetary policies and plummeting commodity prices. The mining sector continued to experience persistent power shortages which adversely affected production,” Masunda said.
He added: “The continuous soaring of power cost, increased by 40% in October 2022 and by a further 15% in November 2023, will have a negative impact on mining costs. The operating environment for the remainder of financial year is projected to remain difficult due to the protracted effects of the macro-economic challenges leading to an increase in input costs.”
Revenue for the resources firm decreased by 43% to US$18.5m due to low nickel sales volume and low nickel prices during the period under review from US$32.5m reported in the same period last year.
The low revenue was a result of reduced tonnage which stood at 177,179 tonnes compared to the 229,790 tonnes achieved for the same period last year.
“The run-of-mine ore was low due to the deterioration of the sub-vertical rock winder [“SVR”] bull gear, resulting in a 70% decline in SVR hoisting capacity. The decline in hoisting capacity also constrained development work planned for the first half of FY2024 as ore hoisting was prioritised over waste. Ore head grade, at 1.10% nickel, was 13% lower than the 1.26% nickel achieved in the comparable period due to reduced high-grade massive ore sources. Recovery at 73.3% was 13% lower than the 84.2% recorded in the previous year, in sympathy with the lower head grade and breakdowns at the concentrator plant due to the deterioration of key components,” Masunda said.
He said ore milled was 163,674 tonnes, which was 29% lower than the 230,248 tonnes milled in the same period last year due to lower mined volumes.
Nickel in concentrate production for the half-year to September 30 2023 was 1,314 tonnes, 31% lower than the 1,918 tonnes produced in the same period last year and the decrease was attributable to the lower ore mined and milled.
Resultantly, Nickel sales volume was 1,416 tonnes, 34% lower than last year’s sales of 2,146 tonnes.
During the period under review, BNC’s current liabilities outweighed its current assets.
The miner’s ability to continue as a going concern was in jeopardy because the current liabilities were valued at US$43.14m, exceeding the assets at US$20.81m.
