BUSINESS REPORTER
Listed nickel producer, Bindura Nickel Corporation (BNC) says its turnover in the 12 months to March 31,2021, increased 13% to US$59.2m from ZWL$52.4m reported in the prior comparative period, despite experiencing a decline in production across most of its operations.
The revenue growth was propelled by a rise in nickel prices at the international markets.
Operating profit increased by 17% to US$3.3 m from US$2.8 m. Net profit increased 97% to US$ 1.7m from US$0.9 m reported in the same period in 2020.
“Global nickel prices improved by 7% during the period under review to an average of US$14 999 per tonne from US$13 983 per tonne in 2020. The increase in nickel prices more than compensated for the reduction in sales volume,” board chairman Muchadeyi Masunda said.
He said nickel in concentrate sold stood at 5 496 tonnes, from 5 685 tonnes sold in the previous year.
Production levels at BNC plunged as a result of the pre-planned shut down to facilitate the commissioning of the Re-deepening and Tie-in.
The shutdown which ran from the beginning of March to the end of April 2021 caused a 5% plunge in ore milled as the BNC recorded 411 754 tonnes, compared to 434 077 tonnes milled in the previous year.
Head grade, at 1.52%, was marginally lower than the 1.53% achieved in the prior year as recovery also decreased from 86.3% to 85.9%, in sympathy with the lower grade.
Nickel in concentrate produced was 5 363 tonnes, compared to the prior year’s production of 5 721 tonnes. The 6% reduction in production was due to the lower milled tonnage, lower ore grade, and lower recovery achieved respectively.
About 5 496 tonnes of ore were sold during the year under review, compared to 5 685 tonnes in the prior year.
BNC managing director Thomas Lusiyano attributed the drop in sales to delays with new customers and also the pre-planned shutdown mentioned before and Covid 19 effects.
“This reduction was mainly due to a late start to the year, occasioned by the delay in the finalisation of an off-take agreement with a new customer, ZOPCO, following the termination of the agreement with Glencore,” he said.
“In addition, there was no production in March 2021 due to the Shaft Re-deepening and Tie-in Project shutdown, whilst the measures instituted by the Government of Zimbabwe in response to the outbreak of the COVID-19 pandemic in early 2020 resulted in a temporary stoppage in production.’’ he added
The all-in sustaining cost of producing nickel in concentrate increased from US$7 606 per tonne in the prior year to US$8 552 per tonne, mainly due to the decrease in production, increase in the cost of maintaining aged mining equipment and increase in local operating costs.
Cash generation during the year was strong, driven by the higher nickel prices on the global markets.
Cash generated from operations, at US$10.4m, was 19% higher than the prior year, despite the decline in production.
Meanwhile, during the year under review, Trojan Mine completed and successfully commissioned the Shaft Re-deepening Project and operations are transitioning from a high-grade–low volume strategy to a high volume–low-grade strategy with an expected upward trend in the nickel in concentrates produced.On the outlook, BNC is expecting a robust demand for the mineral with the price expected to remain strong or even rise.
